Inflation hidden danger for consumers

Posted 2008-02-3

A price comparison Web site points out that although “not unexpected”, the recent interest rate cuts made by the Bank of England could serve to fuel inflation. Many economists agree that continually cutting interest rates could spur borrowing in an economic platform already stretched to tight limits.
As noted by Fool.co.uk, the recent decrease in the cost of borrowing, down a quarter-point to 5.25%, could worsen the state of Britain’s economy. Amid rising energy costs and all time high oil prices, the Bank of England appears unwilling to acknowledge inflationary concerns, and avoid an outright recession.
“However, consumers should be aware of the damaging effects of inflation even if the Bank of England chooses to ignore it for now. In order to beat rising prices, we need to ensure that any savings we have will guarantee a better return,” commented David Kuo, Head of Personal Finance with the Web resource.
Additionally, while consumers are being faced with growing costs, the Bank of England predicts the demand for secured loans to grow during the first three months of the year.

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