Base rate stays at 0.5% again |
The Bank of England has again decided to keep its base rate at 0.5% following today’s meeting. Even though inflation is over double the target of 2%, the lack of movement was widely expected since the economy is still only growing very slowly. It is expected that the first increase will not be until 2012.
The base rate has been at 0.5% since March 2009 when it was dropped by 1%.
Ben Thompson, managing director of Legal & General Mortgage Club, says: ?Our view remains that rates will stay unchanged for the remainder of this year and in all likelihood won?t rise much anytime soon, as we expect inflation to fall back sharply next year, albeit remaining a little above the Bank?s 2% target.
The news probably makes little difference to many house owners and potential buyers since mortgages are still hard to obtain, and interest rates still signifcantly higher than the base rate.
Ewan Edwards, head of retail products at Norwich & Peterborough, reminds consumers that ?while keeping the rate so low is helpful to borrowers, they should be mindful that there is likely to be a rise over the next six to twelve months, so this simply gives them a little more breathing space to review their mortgage and maybe consider finding a good fixed rate deal.?
