Bank holds base rate again

The Bank of England’s Monetary Policy Committee (MPC) has held the base rate at 0.5 per cent again, the 26th month in a row in which It has opted to hold the cost of borrowing at its record low level.

At noon today the MPC revealed there was no change, with the asset purchase scheme also staying put at £200 billion.

With inflation still twice the two per cent target rate the MPC is charged with meeting, the decision may have been influenced by concerns over the absence of any net economic growth over the past two quarters, plus the assumption that a rate rise will not curb inflation caused by international factors such as commodity prices.

The exact reasoning of the body – along with details of how each member voted – will be kept secret until the minutes are published on May 18th.

For those concerned about the threat of repossession, the news is good, since it means the cost of their mortgage repayments each month will not rise.

However, others in financial difficulties could still need debt management solutions as their interest will not be linked to the base rate.

This is particularly true of many with loans and credit cards, with the overall level of consumer credit actually rising in March by £0.1 billion, according to Bank of England figures released this week.

Credit card lending rose by £0.2 billion during the month, although there was a net repayment of £0.1 billion of loans and other sources of lending during the month.

By Joe White