No surprises as base rate is held at 5 per cent

10 July 2008 / by Rebecca Sargent
The MPC has voted to keep the base rate at 5 per cent, which comes as little surprise to director James Caldwell.

"The fact that the MPC has held the base rate at 5 per cent is fairly expected," he said, "and confirms the view held by many economists that the MPC is more concerned about rising inflation than the slowing domestic economy.

"Although a cut may have restored consumer confidence, with inflation well above target, it is difficult for the MPC to cut rates, and seeing as mortgage lenders have so far refused to pass on the two cuts made earlier this year, a further one was unlikely to have had much affect on mortgage affordability anyway."

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