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Base rate held at 0.5%

The Bank of England’s Monetary Policy Committee has held base rate at 0.5 per cent for the twenty-third month in a row and has also held its quantitative easing programme at £200bn.

The last time base rate moved was on March 5, 2009, when it was reduced from 1 per cent to 0.5 per cent.

A programme of quantitative easing was initiated on March 5, 2009. The most recent change to the size of the programme was an increase of £25bn to a total of £200bn.

Norwich and Peterborough Building Society mortgage manager Richard Barker says: “The decision to leave the Base Rate unchanged at 0.5 per cent for the twenty-third consecutive month does not come as a huge surprise.

“Whilst concerns around inflation persist, the economy still remains in a relatively fragile state and the members of the MPC are clearly worried that any increase could snuff out the economic recovery.”

John Charcol senior technical manager Ray Boulger says: “This suggests that the 0.5 per cent Bank Rate will not only reach its second birthday next month but also notch up several more months before a rate rise is justified.

“With arch hawk, Andrew Sentence, due to retire from the MPC after the May meeting it will be even more interesting than usual to see whether The Chancellor replaces him with someone of the same ilk or someone whose view on interest rates is more in keeping with the Chancellor’s position.”

 

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