Interest rate unchanged following MPC meeting

Following its monthly meeting, the Bank of England’s monetary policy committee (MPC) has decided to leave the base rate of interest unchanged.

Analysts had not expected a rate rise today, although some are predicting that it may go up during the summer.

Trevor Williams of Lloyds TSB Corporate Markets said: “We may well see a rate rise before the summer is out Ö we’ve seen rates increased four times since August last year and the effects of these are only just starting to show through.”

It will remain at 5.5 per cent, the level it rose to following the last meeting of the MPC in May.

At that meeting, committee members – faced with rising inflation – voted to add a quarter of a per cent to the base rate.

Government figures published in April revealed that inflation breached a three per cent upper limit in March.

The revelation forced Bank of England governor Mervyn King to write a letter of explanation to Gordon Brown.

Following the last rate rise, there was a rush on fixed-rate mortgage
products as buyers attempted to secure the best deals.

© Adfero Ltd

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