The Monetary Policy Committee has raised interest rates five times since last November to help control the property market and consumer spending and this now seems to have succeeded.
Jak Sardar, economist at Barclays bank, says: “The decision to keep interest rates on hold confirms our prediction that it would not raise rates this month. The five interest rate increases since November seem to be changing consumer attitudes toward borrowing and are having the expected knock-on effect on the housing market as both have slowed.
“However, the MPC has now reached a crossroads and is waiting for more concrete evidence of the economic impact of previous rises before making any further decisions. We expect interest rates to increase by a further 0.25% to 5% by the end of the year.”
Brian Thorn, spokesperson for the Wriglesworth Consultancy, says: “It's what everyone was expecting – the housing market and consumer spending are both cooling. I don't think there will be another rise in the next couple of months, possibly even for the rest of this year.”
Peter Gladdy, director of Mortgages Direct, says: “The homeowner has already been punished enough with the previous rate rises so this freeze comes as a welcome respite.
“Our figures have shown a steady cooling in the housing market since spring but a healthy demand remains for realistically-priced properties.
“The market has stabilised, making any further interest rate rises unnecessary for the foreseeable future.”