Rates could go up, says bank - buy to let mortgages

18 March 2009

Interest rates could be raised again if the Bank of England's £75 billion quantitative easing plan has an inflationary effect, the institution's monetary policy committee (MPC) has said.

Minutes of the MPC's meeting earlier this month were published today, revealing that the vote in favour of cutting the base rate to 0.5 per cent was unanimous.

Such a reduction may help lead to cheaper buy to let mortgages.

However, this low rate may not last, the committee stated, noting that raising the level to curb inflation is an available option should the asset purchase scheme - which will put extra money into the economy via corporate credit markets - push the consumer prices index rate up.

The Bank of England began the process of quantitative easing last week.

It started by picking up £2 billion worth of government bonds from investors and individuals in competitive auctions last Wednesday.