B&B: Base rate decision still in the balance

02 November 2006
Research from the lending arm of Bradford & Bingley has shown that mortgage brokers remain divided over whether the Monetary Policy Committee (MPC) will vote for or against an interest rate change.

According to the survey by Mortgage Express, 40 per cent of brokers expect the MPC to up the basic rate to five per cent at the upcoming meeting, while 42 per cent are predicting that the rate will remain at its current level (4.75 per cent).

The next meeting will be held on November 8th/9th and Peter Charles, the chief economist for Mortgage Express, has said that despite many analysts predicting a rate rise as a foregone conclusion, brokers seemed to suggest it was more finely balanced.

"With two members of the MPC having voted for an increase in [the] base at the October meeting, many people have assumed that a rise in rate in November is a near certainty," he observed.

"But the governor of the Bank of England has made it clear that a rise is 'not a done deal' and that the balance between supply and demand remains even."

Mr Charles added that the only virtual certainty was that "rates are not going down in the near future".

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