Interest rates - Where are they going?

The world markets remain volatile.

We are seeing dramatic, sudden changes to valuations in stock markets in response to world events. The FTSE is riding high in 2011 as is the Dow Jones.

There have been concerns about the UK economy shrinking back into recession and concerns about the high rates of inflation.

Bank of England Base Rate over
the last 12 years

There are mixed reports about how long interest rates will remain low. Mervin King, in his recent trip to Newcastle suggested that they will remain low for some time to come. More recently, reports are that the committee are starting to move towards a rate increase.