Mortgagees 'to benefit from base rate hold'

The decision of the Bank of England to freeze its base rate is "good news" for mortgagees on tracker and standard variable rate deals, it has been suggested.

Yesterday it was announced that interest rates would remain at their historic low of 0.5 per cent for the 11th consecutive month.

Commenting on the decision, Stuart Law, chief executive of Assetz, said: "With the Bank of England having confirmed it is not planning to raise rates even in the face of some short-term higher inflation, it is pretty clear we are in for a sustained period of low rates."

The key objective is "stoking up the economy once more", rather than increasing the availability of cheap mortgage rates, he said.

Mr Law added: "It really does look like we are at the beginning of a classic inflationary period where real assets such as property rise in value for a sustained period, assisted by low interest rates and regardless of the majority view of a poor economic outlook."

The Bank's Monetary Policy Committee also chose to bring its £200 billion quantitative easing programme to a halt.

Moneyextra.com recommends you take independent financial advice before acting on any article

Back

2010-02-05 08:43:47 © Moneyextra.com