Base rate held as minister pledges rises will be slow
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The Monetary Policy Committee kept interest rates on hold at 0.5% last week as the government promised there would no be rapid rise in rates.
The Bank of England base rate was held at the historic low of 0.5% for the 15th consecutive month.
The MPC has also committed to maintaining its £200bn asset purchase programme.
The programme was increased by £25bn in November last year but since then the MPC has kept it at the current level.
Last week housing minister Grant Shapps insisted that the government was prepared to take the tough decisions needed to tackle the budget deficit and prevent rapid increases in interest rates, which he says would be damaging for home owners and those aspiring to enter the housing market.
Shapps says: “If we are serious about supporting people’s aspira-tions for home ownership the real prize is to build more homes.
“For the first time incentives will create benefits for communities, bringing jobs, investment and more homes to local people.
“Rather than being told what to build and where, residents of villages, towns and cities will be able to develop their own vision for the area in which they live.”
He adds: “We will introduce Local Housing Trusts to enable commu-nities to generate new housing for local people.”
Shapps says it is human nature to aspire to shelter and security, and for many that means owning the roof over their head.
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