8 August 2008
The Bank of England base rate has been kept on hold after the monetary policy committee (MPC) voted not to change the cost of borrowing. For the fourth consecutive month, the base rate was left at 5% by an MPC facing the twin problems of rising inflation and a slowing economy. Commenting on the decision, Michael Coogan, the Director General of the Council of Mortgage Lenders, acknowledged that a freeze on rates is better for borrowers than a rise. However, he added: "A reduction would have been a welcome recognition of the current financial strains on households already struggling with hikes in other living costs." Borrowers with secured loans are unlikely to see a reduction in the rates of interest being charged by their lenders this month. However, Howard Archer, the Chief UK Economist at Global Insight, predicts that rates may begin to fall next year, bringing some relief for consumers.
© 2008 Adfero Ltd
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