Private landlords and other mortgage holders are set to see the cost of borrowing remain at 0.5 per cent for the rest of the year and well into 2010, new research suggests.

According to the latest Business Trends report by accountants and business advisors BDO Stoy Hayward, the record low interest rate will stay at its current level until the final quarter of next year.

The publication indicated that this will be necessary to balance low inflation and counter probable rises in taxation.

Peter Hemington, partner at the firm, said: "Consumer spending has helped keep the economy afloat but the chancellor [Alistair Darling] will have to throw consumers a life raft in 2010."

He suggested that quantitative easing and low interest rates will likely continue as a consequence.

The Bank of England's monetary policy committee will meet this week ahead of announcing the interest rate decision for September on Thursday.

Written by Claire Doyle
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