Interest rate hold 'needed' to maintain confidence - commercial mortgages

14 April 2009

The Bank of England's announcement that the base rate is to remain at 0.5 per cent this month will help to uphold confidence in the mortgage market, it has been suggested.

Director at Fairinvestment.co.uk James Caldwell said that the rate could not drop any closer to zero as this would have a negative effect on the financial markets, which could include the commercial mortgages sector.

"Interest rates are as low as they can be without dropping to near zero, which could have detrimental consequences on confidence and lending," he remarked.

Equity strategist at Barclays Stockbrokers Henk Potts stated that the move by the Bank's Monetary Policy Committee (MPC) to maintain the base rate was "expected", adding that "it is far too early" to assess the impact of the quantitative easing policy on the wider economy.

The minutes of this month's MPC meeting will be published on April 22nd.

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