Base rate expected to 'remain on hold'

The Bank of England's base rate is expected to stay the same for some time, according to an economic forecasting group, which could be good news for borrowers looking for the best mortgage rates.

Andrew Goodwin, senior economic advisor to the Ernst & Young ITEM Club, said he expects rates to "remain on hold" for some time.

He believes that VAT is likely to keep inflation at or above three per cent for most of the year but it should drop back below the inflation target next year.

Mr Goodwin said that with "no sign of any wage response, the Monetary Policy Committee MPC will be able to sit tight".

The Bank of England Monetary Policy Committee will meet for the first time in 2011 on January 13th.

The base rate has not been changed since March 2009 when it was reduced by 0.5 percentage points to 0.5 per cent.
 

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2011-01-11 15:55:04 © Moneyextra.com