Interest rates are frozen

Fri, 03 Aug 2007

Interest rates are to be frozen at the current rate, the Bank of England announced yesterday.

After five consecutive rises in the past year, the Bank of England's monetary policy committee voted to keep the base rate at 5.75 per cent, which could be good news for mortgage borrowers.

The previous base rate change was made at the start of July when a 0.25 per cent rise was implemented to take the rate to the current level.

Steve Cox of Spicehaart Financial Services welcomed yesterday's decision, claiming a further rise would have proved "damaging to the market" and said borrowers should be relieved at the decision.

Consumers are already feeling their finances being over-stretched as the recent succession of rises has begun to take affect, he added.

It is thought that interest rates will still rise later in the year as the monetary policy committee tries to meet the government target of a lower rate of inflation.

The Post Office has warned savers not to be complacent as further interest rises could be beneficial to those with savings accounts.


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