UK interest rates held at 5.25%
The Bank of England’s Monetary Policy Committee today voted to maintain interest rates at 5.25%.The previous change in Bank Rate was an increase of 0.25 percentage points to 5.25% on 11 January 2007.
Stephen Leonard, Director of Mortgages at Alliance & Leicester: “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%.
“Borrowers looking for stability should lock in to a competitive fixed rate and avoid the impact of any further rate rises that are expected later this year. Alliance & Leicester is currently offering a competitive 2 year fixed rate mortgage with a rate of 4.99%. For those with a bit more flexibility, there are some excellent base rate trackers available, priced more cheaply than short term fixed rate deals.”
Barry Naisbitt, Chief Economist at Abbey said: "The Bank of England held rates at 5.25% today. Last month’s decision to hold rates acknowledged some of the uncertainties in the economy. It is likely that some of these will have persuaded Monetary Policy Committee (MPC) members to keep rates on hold again in April.
"The decision will not have surprised the markets but they will be looking to the minutes, which will be published on 18th April, to see if there was any voting pressure for a further increase. With inflation at 2.8% and economic growth robust, financial markets are expecting a further rate rise and will be looking for any signals for next month, when the Bank of England will be publishing its quarterly Inflation Report.
"In the meantime, the MPC will be closely watching the news on pay settlements, economic activity, inflation and inflation expectations to assess whether it needs to raise rates at its next meeting on 10th May to ensure that inflation returns sustainably to its 2% target".