Base rate stays at 5%

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

Most analysts anticipated that the bank’s monetary policy committee (MPC) would hold fire on the cost of borrowing this month in light of the latest economic data.

A cut in the base rate could have offered some relief to homeowners and consumers facing a debt management struggle but the inflation situation around the country is thought to have forced the MPC’s hand this month.

In response to the latest decision from the bank, David Kuo, head of personal finance at Fool.co.uk, accused the MPC of “sitting on its hands”.

He suggested that by taking no action on interest rates, the committee was neither helping consumers to improve their financial situation nor decreasing the prospect of inflation.

According to Credit Action, consumers in the UK pay out around £258 million each day to service the interest on their collective debt management mountain.

Written Frank Charlton