Interest rates maintained

The base rate of interest has been maintained at 5.5 per cent, the Bank of England has announced.

Economic experts are convinced that the rate will be reduced at some point over the course of the next few months, but the bank’s monetary policy committee (MPC) has opted to hold fire until February at the earliest.

A fall in interest rates could have resulted in some relief for thousands of homeowners struggling with debt management problems, particularly for those people coming off fixed-rate mortgage deals in early 2008.

“We suspect that the MPC vote to leave interest rates unchanged today was extremely close, and we believe it is highly probable that the Bank of England will interest rates by a further 25 basis points to 5.25 per cent in February,” said Howard Archer, chief UK and European economist at Global Insight.

The Bank of England added to the financial pressures on many UK consumers with debt management problems when it increased the base rate of interest on five occasions in the 12 months after August 2006.