Interest rates could remain as high as five per cent at the end of 2008, one financial expert has predicted.
The Centre for Economics and Business Research (Cebr) said that the economic slowdown and pressures of inflation are likely to keep interest rates as they are with the possibility of one more interest-rate cut this year.
Charles Davis, economist at CEBR, said that the prediction has changed somewhat with inflation being quite persistent and expected to go up in the future.
"Whereas before we were looking at [interest rates falling] perhaps down to as low as 4.5 or 4.25 per cent, I think we are now probably looking at 4.75 to 5 per cent by the end of the year," he stated.
Mr Davis concluded: "The slowdown is serious."
According to the Office for National Statistics, April saw consumer inflation reached its highest level in 13 months driven by high food and fuel costs.
Meanwhile, the Consumer Price Index annual inflation was up from 2.5 per cent in March to three per cent in April.
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