The Bank of England’s monetary policy committee (MPC) today elected to maintain the base rate at the current level.
Market analysts and industry insiders had widely predicted the decision, with most speculating that the MPC would wait to assess the effects of the previous interest rate rises.
Prior to the shock interest rate rise in January, implemented to curb inflation, there had been two more rate rises since August 2006.
The British Retail Consortium welcomed today’s decision and said that the MPC had made the right choice.
“We have yet to see anything like the full effects of the November and January increases,” said the trade association’s director general Kevin Hawkins.
However, some analysts are predicting a further rate rise this year; Howard Archer of Global Insight expects the base rate to reach 5.5 per cent “by summer”.
Prospective borrowers may be relieved at today’s decision as it affords them more time to search for the best rates on a loan or mortgage.
In the wake of January’s rate rise, mortgage lenders all over the country pulled their fixed rate products after a last minute rush by borrowers.
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