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Bank rate remains at historic low

Published: 05/02/2010

Mortgage and loan rates are likely to remain steady for now as the Bank of England has maintained its lending rate at 0.5 per cent.

The Bank also announced a pause in its artificial bolstering of the economy though quantitative easing while leaving the interest rate at a historic low.

Robert Sinclair, director of the Association of Mortgage Intermediaries (AMI) commented: "It comes as no great surprise that the Committee has chosen not to extend its quantitative easing programme.

"However, leaving the door open for further consideration indicates that the Committee remains concerned that base-rate levels alone are not enough to maintain the recovery. The monetary injection was entirely necessary at the time."

He added that if inflation rises faster than expected, then interest rates are likely to also rise "sooner, and faster, than we expect".

But for now, "the assurance that the Committee considers the inflationary factors are supply driven is encouraging".

According to Mr Sinclair any sudden increase rates could result in serious problems for millions of homeowners and put "pressure on the housing market."

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