Bank of England holds interest rates steady

Posted: 05 Oct 2006 12:27:05 GMT

The base rate of interest in the UK will remain at 4.75 per cent for another month.

The base rate of interest in the UK will remain at 4.75 per cent for another month following a meeting of the Bank of England's Monetary Policy Committee (MPC).

The MPC's September meeting also saw interest rates hold steady at 4.75 per cent and UK consumers will be breathing a sigh of relief this month, as a small increase in the base rate can push mortgages up considerably.

House prices have continued to rise steeply despite a quarter point increase in the base rate this August, the first rise in two years.

Analysts are widely predicting a quarter point increase in the cost of borrowing next month to five per cent, as the MPC attempts to cool the housing market in the face of affordability and supply issues.

Many experts suggest that a further interest rate will also help to dampen inflation, which has soared above the government's two per cent target as a result of high energy costs.

Many Britons are struggling with high levels of personal debt and costly mortgages and many would be left struggling by a further increase in interest rates.

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