Base rate remains 5.75%

Posted: 05 Oct 2007 11:06:02 GMT

The base rate of interest has been held at 5.75 per cent for the third consecutive month.

The base rate of interest has been held at 5.75 per cent for the third consecutive month.

It follows five rate rises between August 2006 and July 2007 and will be warmly welcomed by homeowners across the UK.

The decision by Bank of England's Monetary Policy Committee (MPC) was widely expected but rumours are now growing that rates will be cut before the end of the year.

Stephen Leonard, director of mortgages at Alliance & Leicester, said that borrowers will have to wait and see if the MPC will cut rates so soon.

"[The latest] interest rate decision shows that Bank of England continues to take a cautious mid to long-term view about inflation," he commented.

"Any future decision to reduce interest rates will be made once the Bank has a clearer view on how the recent turbulence in world markets affects the economy," added Mr Leonard.

Other analysts have been less cautious, with the Council of Mortgage Lenders and others predicting that the Bank will cut the base rate in November.

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