UK interest rates held at 5.0%

The Bank of England's Monetary Policy Committee today voted to maintain UK interest rates at 5.0%.

The previous change in Bank Rate was a reduction of 0.25 percentage points to 5.0% on 10 April.

Alun Powell, Senior Economist at HSBC Bank commented: "The range of inflationary data released over the past few weeks made the chance of a base rate cut this month very unlikely. However, there are clear signs that the price of oil - a key driver of inflation - is starting to come down and there is also little evidence of any upward pressure on wages. We certainly expect the MPC to cut rates over the next month or so which would provide welcome relief to many homeowners."

Stephen Smith, Director of Housing at Legal and General, commented: "The MPC has to tread the tightrope between managing inflation and giving borrowers some slack very carefully. The good news is that short-term fixed rates are starting to come down in price in line with swap rates, but it is no surprise that the base rate was held at 5% today. Things aren't nearly as bad for all borrowers as is sometimes portrayed, in fact for those with reasonable levels of equity in their home, they have quite a bit of choice and pricing is competitive. Yes, first time buyers are struggling but when lenders start to become more active in high LTV lending again, the industry will bounce back very quickly."