Interest rate holds

Fri, 07 Sep 2007

The Bank of England has voted to keep the base rate at 5.75 per cent for the time being, it emerged yesterday.

Mortgage holders are likely to be pleased by the decision, made by the monetary policy committee, as it means monthly mortgage payments are unlikely to increase.

The decision came after August's Inflation Report, which showed the inflation level was close to the government's target of two per cent.

A lower inflation rate reflects a slow down in consumer spending and business investment .

The committee stated that it will be continuing to monitor the effects on the availability of credit to households and businesses after the recent volatility in the stock market .

Commenting on the decision, director general of the Council of Mortgage Lenders Michael Coogan said: "There is now much clearer evidence that the cumulative effect of five rate rises since last August is slowing activity in the housing market."

The Council of Mortgage Lenders suggested that the next interest rate decision may see rates decrease rather than increase if credit further tightens.

add to favouritesnewsletterlink to this pagesend to friendpost comments

Link to this page

Copy and Paste the following HTML into your page.