Some good news at last - inflation appears under control

Filed Under Finance

Let’s celebrate some good financial news today as inflation has fallen slightly to 1.8 percent. As that is below the governments self imposed threshold of 2 percent, it is safe to assume that interest rates will not rise for the foreseeable future.

In fact the next move for interest rates may well be downwards, though I can’t see this happening for several months, unless we experience a worsening of the credit crunch problems.

While I am feeling buoyant, I’ll mention that shares in Northern Rock and other vulnerable banks such as Alliance and Leicester have bounced back today in response to the move by the government to guarantee the deposited funds in Northern Rock.

As I said in my previous post, it would probably have been a blood bath in the banking industry today without the new Bank of England’s funding guarantees.

But those renewing their fixed rate mortgages still have some difficult choices to make. With fixed rate mortgages becoming cheaper, but discounted rates becoming more expensive, now is the time to navigate through this confusing situation to secure the best possible deals before any more turmoil descends on the finance markets.