Bank of England keeps base rate at 0.75%

The monetary policy committee has voted unanimously to keep the base rate at 0.75 per cent.

The rate has stayed at this level since it was raised from 0.50 per cent in early August this year.

The MPC meeting minutes detail the committee’s belief that global growth risks have increased, but because of the recent drop in oil prices, the UK consumer price index inflation rate should fall below 2 per cent “in coming months”. It currently stands at 2.2 per cent.

Regarding any future moves, the MPC states the importance of the Brexit outcome, and adds that any monetary policy response to the UK’s withdrawal from the EU “will not be automatic and could be in either direction.”

The bank adds that it expects UK GDP growth for Q4 to come in at 0.2 per cent, 0.1 per cent weaker than previously expected.

Primis proposition director Vikki Jefferies says: “The Bank of England’s decision to maintain the current interest rate is no doubt a reflection of today’s uncertain political climate. We have seen an increase in buyers adopting a ‘wait and see’ approach when it comes to purchasing their next property, which means that advisers need to respond accordingly.”

Legal & General Mortgage Club director Kevin Roberts adds: “Today’s decision will undoubtedly be music to borrowers’ ears. While some maybe winding down to focus on the festivities, a wide range of products on the market coupled with competitive rates, continue to entice buyers.

“For any borrowers concerned about any future interest rate rises, now is a good time to lock into a fixed rate deal.”

Santander UK chief economist Frances Haque comments: “The decision to hold rates was widely expected by both the market and commentators, given the continued uncertainty over Brexit.”

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