Bank of England maintains base rate

The Bank of England's Monetary Policy Committee MPC voted to maintain the bank rate at 0.5 per cent yesterday September 9th.

Ray Boulger, of leading independent mortgage adviser John Charcol, said that the various economic statistics
released over the previous month had done little to strengthen the case for an increase so a freeze seemed likely.

Discussing what this will mean for mortgage rates he said: "Lenders are focusing more on being competitive in the shorter term fixed-rate market, widening the gap between two and five year fixed-rate pricing, despite the swap rate differential narrowing. This results in more borrowers choosing a two year fix because of the widening interest rate differential."

He believes there is a 'chicken and egg' concept developing as consumers wait to see how the bank rate will rise before borrowing and the MPC waits for signs of economic improvement.

The decision means the bank rate has remained at the same level for the 18th consecutive month as the previous change in Bank Rate was a reduction of 0.5 per cent to 0.5 per cent on March 5th 2009.
 

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2010-09-10 12:33:08 © Moneyextra.com