Bank of England votes to hold interest rates

Despite speculation to the contrary, the Bank of England has announced today that interest rates will remain at 0.25%.

The decision comes one year after the Monetary Policy Committee’s (MPC) historic rate cut and was the result of a 6 – 2 vote by the MPC.

The fact that predictions for economic growth have been downgraded to 1.7% this year, compared to previous estimations of 1.9%, are said to have influenced the outcome of the vote. 

Next year’s growth expectations have also been revised down from 1.7% growth to 1.6%.

Jeremy Duncombe, Legal & General Mortgage Club director said: 

“These historic lows won’t last forever, particularly as inflation starts to creep upwards. A base rate rise this year, whilst not a certainty, is possible. Consumers should take the opportunity to get in touch with their adviser now, so that they can review their existing mortgage arrangements.

Time is of the essence to secure a new deal, which could potentially save them thousands of pounds, before interest rates inevitably rise again.”

Richard Sexton, e.surv director added:

“… with the current political and economic uncertainty, it is not a question of if, but when will rates eventually rise. It’s interesting to consider that for many current mortgage holders, they have never experienced a rate rise and the impact of any payment shock is unknowable at this time.”

 

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