It is the third consecutive month that the rate has remained the same. The market can breathe a sigh of relief as many had feared that a rise would dampen demand for mortgages. However, commentators are suggesting that the BoE is only delaying the inevitable rise.
Savills Private Finance director Melanie Bien says: “We welcome this decision but expect another rate rise, possibly as soon as next month, as retail sales remain strong and signs of the housing market cooling remain uncertain.”
Alliance & Leicester director of mortgages Stephen Leonard says: “General consensus within the industry pointed to the base rate staying the same this month but many now expect a hike in May. The money markets have been pricing in at least one rise in the base rate this quarter, with rates potentially being cut later in 2007 or in 2008 as inflation drops back towards the MPC target of 2 per cent. Borrowers looking for stability should lock into a competitive fixed rate.”