As widely predicted, the Bank of England's Monetary Policy Committee has voted to keep interest rates the same this month, at 0.5 per cent.
Savers will breathe a sigh of relief at the news, which means that the returns on their savings accounts
are not going to fall even further, having already seen them plummet in recent months.
Homeowners with variable rate or tracker mortgages
will be pleased that the record low rates which they have been enjoying of late will not yet be coming to an end.
Some homeowners have seen hundreds of pounds knocked off their monthly mortgage payments, as the base rate fell from five per cent last September to just 0.5 per cent in March, taking mortgage mortgage
rates with them.
Commenting on the MPC's decision not to cut interest rates
further, James Caldwell, director at Fairinvestment.co.uk, said: "The news is hardly surprising because the MPC has nowhere else to go, interest rates are as low as they can be without dropping to near zero, which could have detrimental consequences on confidence and lending.
"Having said that," Mr Caldwell continued, "it is unlikely that the base rate will creep back up any time soon, as the effects of quantitative easing have yet to be seen in the economy, along with other Government initiatives.
"In the meantime, savings account rates are unlikely to fall much further, and mortgage interest rates could start to stabilise if the Bank decides to hold interest rates steady for a while, which is at least better than the instability created by the constant interest rate cuts of the last six months," he said.
Andrew Hagger, from Moneynet.co.uk, said of today's base rate decision: "The MPC decision to leave rates on hold will be welcomed by millions of battered savers, although it is a miniscule crumb of comfort when you look at savings rates on offer today compared with last October."
He added: "Older savers will be hoping that Alistair Darling appreciates the predicament that those on a fixed income are facing and delivers some worthwhile concessions in the forthcoming budget rather than just papering over the cracks with a token gesture."
The MPC has also voted to continue with the asset protection programme, announced after the last meeting on March 5, totalling £75billion, financed by the issuance of central bank reserves.
Since its last meeting, the MPC noted that a little over £26billion of asset purchases have been made, and that it will take another two months for the programme to run its course.
Ben Thompson, director of mortgages at Legal & General, commented on the recent shift in focus from interest rates to quantitative easing, and highlights the risks to homeowners if or when interest rates start to rise again.
The "primary concern for borrowers," he said, "will be how long rates are going to stay so low. They aren't set to go any lower but they aren't going to rise in the short term either. Inflation is likely to fall in the coming months as a result of the prolonged downturn so there is no impending pressure to raise the base rate at present. Borrowers need to seize this opportunity to pay off as much of their mortgage as possible. When rates do start to rise, it could quickly turn ugly."
© Fair Investment