Friday 11th September 2009

The Bank of England monetary policy committee (MPC) has held the base rate at 0.5% for the sixth month running.

The decision was widely expected by the industry with experts predicting the rate will remain at the all-time low until next summer.

The bank also said it will continue with its £175bn quantitative easing scheme but will not extend it this month. In August the Monetary Policy Committee injected £50bn into the economy to create up to £175bn on the UK's balance sheet.

Ray Boulger of leading UK mortgage broker John Charcol said: “It seems probable that bank rate will remain at 0.5% until well into next year and that any policy changes announced by the MPC will focus on its QE programme or involve some other radical new policy.

“Seasonal factors resulted in August being, as usual, a relatively quiet month for mortgages - even by this year’s standards - and it was the first month for a while that some lenders failed to hit their lending targets. This, coupled with lower Libor and swap rates, has resulted in some lenders making modest cuts in their mortgage rates which can only be good news for consumers.”

Posted 11/09/2009 10:31:05