Base rate stays on hold

The Bank of England’s Monetary Policy Committee (MPC) has announced that it is holding the base rate again.

In its monthly meeting, the nine-member body revealed that the figure is to stay at 0.5 per cent, with quantitative easing – which it said has two months left to run – staying at £200 billion.

This was the eighth month in a row that the base rate remained the same and those keen on taking out credit cards in the hope the cost of these will not rise may be heartened by projections that consumer prices index (CPI) inflation will stay low.

According to chancellor Alistair Darling – speaking yesterday in his Pre-Budget Report – the CPI level will reach three per cent next year before falling back.

Ray Boulger, a spokesman for mortgage brokers John Charcol, said that this will mean the Bank’s governor Mervyn King will not have to write an explanatory letter to the chancellor.

He added: “As long as the CPI is expected by the MPC to fall back to well below the two per cent target … there will be little pressure on the MPC to increase [the] Bank rate.”

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