UK interest rates held at 5.5%

The Bank of England’s Monetary Policy Committee today voted to maintain interest rates at 5.5%.

The previous change in Bank Rate was an decrease of 0.25 percentage points to 5.5% on 6 December 2007.

Barry Naisbitt, Chief Economist at Abbey commented: "The Bank of England held rates at 5.50% today. Financial markets were undecided about the prospects for this month but were firmly expecting a rate cut either this month or next. There are now more signs of slowing economic activity than a month ago, with some recent indicators from retailers adding to this.

"I presume that the majority of Monetary Policy Committee (MPC) members judged that these needed to be balanced against both their expectation that activity would slow and that some inflation indicators remain high. They will have another chance to review this, with more data to examine, next month.

"Since next month sees the next quarterly Inflation Report from the Bank of England, markets will be looking forward both to the decision on rates and to understanding how the Bank is interpreting the latest economic information."

Stephen Leonard, Director of Mortgages at Alliance & Leicester, commented: “There was wide speculation about this month’s interest rate decision but today’s announcement to maintain interest rates at 5.5% has not come as a shock.

“First time buyers looking for a mortgage deal should consider taking out a fixed-rate mortgage which will give them the security of fixed monthly payments. A tracker mortgage is a good option for homeowners who are financially flexible and looking to take advantage of any further interest rate cuts during the next 12? months.”