Interest rate remains at 4.5%

07 July 2006
The Monetary Policy Committee (MPC) has announced that it will be recommending to the Bank of England (BoE) that the base rate of interest remains locked at 4.5 per cent for the eleventh straight month.

The committee last recommended a change on 4th August last year, when the base rate was dropped by 0.25 per cent to its current level.

Industry analysts and observers had widely predicted that there would be no change, despite a slightly stagnant housing market during the World Cup period, although the same analysts argue that July will see a minor 'recovery' from what was essentially a minor 'slump'.

"Despite a number of global uncertainties, it comes as no surprise that the base rate remains unchanged this month," said Mehrdad Yousefi, head of intermediary mortgages at Alliance and Leicester.

"The immediate signs are that demand for housing will remain robust over the next few months, although there has been a lull in activity during the World Cup period," he confirmed.

"The view is, however, that confidence and activity are closely associated with interest rate movements and expectations," he added, encouraging borrowers looking at refinancing options to "take advantage of tracker deals…currently priced below the base rate".

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