Bank of England holds base rate at 0.5%

The Bank of England has maintained the base rate at 0.5 per cent and the size of the asset purchase programme at £375bn.

Bank of England BoE Panorama 480

The Bank’s Monetary Policy Committee today voted to keep the base rate at the record low level of 0.5 per cent where it has remained since March 2009.

The quantitive easing programme has been held at £375bn. The programme has not been changed since July 2012 when it was raised by £50bn.

Committee members will next vote on 4 April.

Legal & General mortgage club managing director Ben Thompson says: “Nearly 320 years ago, it took the princely sum of £1.2m to effectively establish the Bank of England. This was done in the form of a loan to the Government at the time. Over the last 6 years alone, significant money has been spent on first propping up and then stimulating the UK economy – in fact more pounds have been spent on keeping the UK banking system and economy going through this period, than total seconds have passed since the Bank was first established in 1694.

“With that in mind it feels important to not provide too much ‘medicine’ in the shape of Quantitative Easing. However, of equal importance is for the Bank to give the tentative recovery every chance. We very much need this to continue and strengthen, and low borrowing costs for yet another month will do no harm whatsoever.”

Castle Trust chief executive Sean Oldfield says: “Even after four years of a record low base rate, mortgage lending is still at the same level as it was in 2009 and well below earlier levels.

“Increased competition in the mortgage market driven by a combination of Funding for Lending and the resurgence of building societies is very welcome but the development of innovative mortgage products is absolutely crucial to sustain a competitive market. This will reinforce the improvement in lending conditions and provide a wider range of mortgage options for homebuyers.”