Rates on hold for February

Posted: 09 Feb 2007 10:29:36 GMT

The Bank of England has left interest rates on hold for February as it attempts to gauge the impact of January's shock quarter-point increase to 5.25 per cent

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The bank has increased interest rates three times in the past six months and analysts remain divided on whether the rises will continue into the spring.

"Many market analysts will view this latest decision by the Bank of England as a mere delay of an inevitable further rate rise," said Mehrdad Yousefi of Alliance & Leicester.

"It is crucial that borrowers assess what impact any possible future base rate rises could have on their finances."

Other analysts, such as Simon Ward of New Star Asset Management, said that the situation was hard to read without the release next week of January inflation figures.

There are some signs that the most recent rate rise has gone some way to cooling the housing market, with mortgage applications and first-time buyer applications down.

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