The Bank of England has once again voted to keep interest rates at their record low rate of 0.5 per cent, it was announced today. This historic low rate has now been maintained for 23 months.
The Bank’s Monetary Policy Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200 billion. Furthermore, a new round of quantitative easing has not been introduced.
As a result, landlords on variable rate mortgages will continue to enjoy low repayments for at least one more month, although there is growing evidence that the prospect of a future base rate change has started to have an impact on consumer confidence.
Many industry observers have voiced concerns that the recent increase in consumer inflation would prompt the Bank to increase rates, but as Ray Boulger, mortgage expert at John Charcoal, points out, this would not affect the two main factors causing inflation, namely VAT and commodity price rises.
Steve Lees, Director at SmartNewHomes, said: “The decision not to increase the base rate this month is good news for the industry, however, the expectation that rates will rise soon has already pushed up the cost of fixed rate mortgages.”