Mixed opinions as rate rise looms – papers 2nd April

THE BANK OF England could lift interest rates as soon as this Thursday, taking borrowing costs to a new six-year high, according to the Daily Telegraph.

City analysts are arguing a run of unexpectedly strong data over the past week had raised the pressure on the Bank's Monetary Policy Committee to consider raising rates to 5.5%, says the Telegraph.

The Bank indicated in its Inflation Report in February a further increase in borrowing costs would be necessary to keep inflation under control, and Governor Mervyn King said last week the situation had not changed. However, most economists think the Bank will wait one more month to see what effect three previous increases have had on the economy, and to give it the opportunity to use an updated set of quarterly inflation forecasts.

In contrast, however, The Scotsman is running a story which suggests rates will stay on hold at least for this month.

Analysts they are quoting suggest interest rates will be held again on Thursday this week.

However, business organisations suggest the increasing inflationary pressures will begin to impact consumers as firms shift rising costs onto the end products, services and borrowing.

A MAJOR CHANGE in Japanese law is likely to see more than 40,000 Japanese workers handed divorce papers today, suggests the Times, as disgruntled wives now have the right to claim half their husband’s company pension.

In the run-up to the change, offices of the Social Insurance Agency are said to have reported tens of thousands of divorce-related inquiries since October — 86% of them from women wondering what kind of payout they can exact under the new law, the rest from nervous husbands braced for the worst.

According to one think-tank, 42,000 men may be in the immediate firing-line and lawyers and analysts of Japanese social trends say that for the past two years a pattern has emerged. Between 1995 and 2005, the number of divorces involving a partner over 60 was on an apparent unstoppable surge, reaching a high of 19,000 two years ago.

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