Bank of England base rate decision – comment and analysis

Sean Gardner, founder of, said:

"In recent months it’s actually the rate of LIBOR that banks have been most concerned about, so movements in the base rate aren’t as important as they used to be."

"Every bank has had to address a slightly different set of issues when it comes to putting its house in order post credit crunch. Consequently banks aren’t following the normal rules and are increasing and dropping rates on lending whenever it suits them."

"Since November the average variable rate on mortgages has only dropped by 0.2 per cent from 6.7 per cent to 6.5 per cent now. In the same period the base rate has dropped 0.75 per cent – so lenders are clearly doing whatever suits them rather than taking their lead from the Bank of England."

"Perhaps the best barometer of all for trends in the mortgage market is an online comparison website, which can show consumers at a glance what is competitive and what isn’t."

"With the £50 billion cash injection from the Bank of England last month, though, things are starting to look more positive, and holding the base rate may be a cautious indication of a greater confidence in the financial markets."

"Mortgage providers, certainly, are starting to come out of their shells again with the likes of HSBC and Lloyds TSB making some positive, competitive moves in the market."

"That’s not to say we’re in the clear by any means. Over the last six months 18,000 people were turned down for a credit card application every day. So borrowers aren’t out of the woods yet."

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