Commercial mortgage holders see rate remain at 0.5%

10 September 2009

Written by Jeni Browne

Those with commercial mortgages will have seen the Bank of England's monetary policy committee (MPC) hold interest rates at 0.5 per cent today, but there are apparently still a number of financial restraints holding businesses back.

David Kern, chief economist at the British Chambers of Commerce (BCC), said that there is still weakness in lending to UK companies, particularly small to medium-sized enterprises.

He added that this poses "serious risks to the early signs of economic recovery" and suggested the MPC should consider cutting the interest paid on deposits kept by commercial banks at the Bank, as this may encourage more lending.

The BCC economist also indicated that the group was "not surprised" at the MPC's decision to keep interest rates at 0.5 per cent for the sixth consecutive month.

It has remained at this level since March 2009 and many economic observers expect it to stay this way well into next year.

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