Base rate held at 5%

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

Members of the bank’s monetary policy committee (MPC) opted not to take action on interest rates having reduced them last month in the face of an economic slowdown.

Families across Britain are struggling to become debt free and commentators have suggested that a reduction in the base rate would have eased some of their burden.

However, with inflationary pressures in mind, the MPC has decided to maintain the current cost of borrowing until next month at least.

In response to the decision, director general of the Council of Mortgage Lenders Michael Coogan said: “The MPC had an opportunity to act to anticipate the worsening economic environment today, and it is disappointing that there has been no change.”

According to Credit Action, the average debt management burden, including mortgage arrears, of a British household currently stands at more than £57,000.