BoE votes to hold base rate at 0.5 per cent
Share
The Bank of England’s Monetary Policy Committee has today voted to keep base rate at 0.5 per cent for the sixteenth consecutive month.
The committee also voted to maintain the level of the asset purchase programme at £200bn.
The last change in base rate was on March 5, 2009, when it was reduced by 0.5 per cent to 0.5 per cent. The asset purchase programme was also initiated on March 5 the same year. The programme was increased by £25bn on November 5, 2009, to £200bn.
Drawbridge Finance chief executive Jonathan Samuels says: “Interest rates are on hold again but the hawks, led by Andrew Sentance, are beginning to circle. The minutes of this latest MPC meeting due to be published later in the month will offer a strong clue as to when Bank Rate will finally rise.
“Even when rates do rise, we expect the percentage increases to be small and incremental and this, coupled with the fact the market has already begun to price them in, is unlikely to put the property market into reverse.
“Higher rates will naturally add to the headwinds facing borrowers and the property market but at the same time they are a necessary evil, a key step back to a more normal functioning of the economy and lower inflation.
Last month MPC member Andrew Sentance voted to increase the base rate by 0.25 per cent, the first time a rate rise has been suggested since August 2008.
On Monday, Chancellor George Osborne announced that Dr Martin Weale will succeed Kate Barker as external member on the committee.
If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing
