UK interest rates held at 0.5%

The Bank of England's Monetary Policy Committee today voted to maintain interest rates at 0.5%.

The Committee also voted to continue with the programme, announced on 5 March, of asset purchases totalling £75 billion financed by the issuance of central bank reserves.

The Committee noted that since its previous meeting a total of just over £26 billion of asset purchases had been made and that it would take a further two months to complete that programme.

The previous change in Bank Rate was a reduction of 0.5 percentage points to 0.5% on 5 March 2009.

Ben Thompson, Director, Mortgages at Legal & General said: "There are increasing signs that the housing market has passed its worst point but there is still plenty of data to support a pessimistic outlook, depending on what you choose to look at. Interest rates are likely to have been replaced by quantitative easing as the main topic of conversation for the MPC today. However, the primary concern for borrowers will be how long rates are going to stay so low. They aren't set to go any lower but they aren't going to rise in the short term either. Inflation is likely to fall in the coming months as a result of the prolonged downturn so there is no impending pressure to raise the base rate at present. Borrowers need to seize this opportunity to pay off as much of their mortgage as possible. When rates do start to rise, it could quickly turn ugly."