The Bank of England has held interest rates at 5.25 per cent.
This follows last month’s quarter point rise. Alliance and Leicester head of intermediary mortgage Mehrdad Yousefi says: “Today’s MPC decision to maintain the base rate at 5.25 per cent will come as a welcome relief to borrowers, but many market analysts will view this latest decision by the Bank of England as a mere delay of an inevitable further rate rise.
“Inflationary pressures on the economy remain strong, including some above inflation pay deals, and they will play a key part in future base rate decisions. The consensus of opinion is that i t is very likely that we will see another rate rise in the first half of 2007, so it is crucial that borrowers assess what impact any possible future base rate rises could have on their finances.
“For borrowers looking for certainty with their mortgage, the best option is to lock in to a competitive fixed rate deal now to avoid the impact of any further rate rises. Borrowers with a bit more flexibility will find some excellent base rate trackers available, priced at least 0.3 per cent cheaper than short-term fixed rates which might suit their financial situation.”