Bank of England Base Rate Held

It’s a shame that the Bank of England decided to hold interest rates at 5.25%, but this time the Monetary Policy Committee found itself in a no-win situation.

A cut would have been a welcome boost for homeowners, especially first-time buyers, and would have helped offset the rises in tracker rates, which have been occurring regularly over the past few weeks as lenders fight to increase their margins. It would also have come as a boost to the weakening housing market, which, according to Halifax, fell by 0.3% in February.

However, the Bank is also concerned by inflation, and had already warned in February’s inflation report that there may not be room for many more cuts in order to keep this in check. With this in mind, and the prospect of further rate rises among lenders, fixed rate products could prove attractive at present.

posted @ Thursday, March 06, 2008 12:15 PM | Feedback (0) |
Monday, March 03, 2008