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Industry reacts to interest rate freeze

The most recent change in interest rates was an increase of 0.25% to 4.75% on August 5 2004.

The Monetary Policy Committee has raised interest rates five times since last November, to try and grind to a halt, the UK property market and consumer spending.

Jak Sardar, economist for Barclays says: “&#39The decision to keep interest rates on hold at 4.75% confirms our predictions that they would not raise rates this month. The five interest rate increases since November finally seem to be changing consumer attitudes towards borrowing and are having the expected knock on effect on the housing market – as both have slowed. However the MPC has now reached a cross roads and are waiting for more concrete evidence of the economic impacts 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 is what everyone has been expecting, the housing market and consumer spending are cooling. I don&#39t think there will be another raise in the next couple of months, possibly even the year.”

Peter Gladdy, director of Mortgages Direct, says: “The homeowner has already been punished enough by the Bank of England with previous rate rises, so today&#39s freeze is 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.”

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