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Bank of England maintains bank rate at 5.75%

The Bank of England’s Monetary Policy Committee voted today to maintain the official bank rate at 5.75 per cent.

Alliance & Leicester director of mortgages Stephen Leonard says the decision shows the Bank of England continues to take a cautious mid to long-term view about inflation.

He says: “For borrowers looking to remortgage or take out a new mortgage this month, a tracker mortgage is a sound option in the current interest rate environment.

“However, borrowers opting for a tracker mortgage should ensure they are financially comfortable enough to withstand an increase in monthly payments should there be any future rate rises.”

The Council of Mortgage Lenders says the move was widely expected but it believes a November cut remains the most likely prospect.

CML director general Michael Coogan says: “We did not expect the Bank to cut rates today, but we do hope for and anticipate a cut in November. Even this is not a certainty though, so borrowers should continue to plan for rates at or around current levels.

“Pricing in the mainstream market is stable, and fixed rates have started falling recently, but there is still uncertainty about how long it will take for stable funding to return to the sub-prime market. In the meantime, borrowers in this sector are facing tighter criteria and higher rates, although the availability of funding does seem to be improving.”

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