Interest rate left unchanged

Posted: 07 Sep 2006 16:36:26 GMT

            Property News - Interest rate left unchanged

The Bank of England has announced that interest rates will remain unchanged at 4.75 per cent after its latest meeting.

Analysts had been speculating as to what the decision would be, but it seems the bank's Monetary Policy Committee (MPC) has decided to wait another month before concluding whether August's rise had any effect.

Inflation is still higher than the bank's target rate and so another rate rise in the near future can't be ruled out.

Drew Wotherspoon, from John Charcol, stated: "It's no surprise to see base rate held today as the true impact of last months increase, the first move in a year, is still to be fully felt.

"Inflation is also still way above target at 2.4 per cent and a 0.1 per cent fall on last month's figures shouldn't be seen as a solid correction in the market."

The news is a short-term respite for mortgage holders and first-time buyers looking to get a mortgage.

Currently tracker mortgages - that keep in line with the current interest rate - are still good value.

"Trackers will continue to be a good option unless base rate rises above 5.25 per cent which won't happen in the near future," said Ms Wotherspoon.

The bank will make its next interest rate report on October 5th and will study the inflation situation on September 12th. The inflation target rate is two per cent.

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