You are here: Home - Mortgages - Buy To Let - News -

Bank of England holds interest rates, freezes QE

Written by:
The BoE has voted to keep Base Rate at 0.5%, and not to increase its £275bn Quantitative Easing (QE) programme.

The vote by the Monetary Policy Committee (MPC) of the Bank marks the fourth year of ultra-low interest rates, which is good news for mortgage borrowers, though less positive for savers and pensioners.

A number of commentators believe that the UK Bank Base Rate is likely to be kept at 0.5% until 2017.

The decision not to pump more money into the QE bon-buying programme suggests that outgoing BoE governor Mervyn King may have been outvoted again. At the February MPC meeting, King and two others voted to increase QE by £25bn to £400bn.

More than 40% of economists were expecting QE to be extended, hoping for a fresh stimulus to economy. But some MPC members feel that QE is not working and want more time to assess the impact of the Funding for Lending scheme before approving another cash injection.

Ben Thomson, managing director of Legal & General Mortgage Club, said:

“Nearly 320 years ago, it took the princely sum of £1.2 million to effectively establish the Bank of England. This was done in the form of a loan to the Government at the time. Over the last six years alone, significant money has been spent on first propping up and then stimulating the UK economy – in fact more pounds have been spent on keeping the UK banking system and economy going through this period, than total seconds have passed since the Bank was first established in 1694.

“With that in mind it feels important to not provide too much ‘medicine’ in the shape of Quantitative Easing. However, of equal importance is for the Bank to give the tentative recovery every chance. We very much need this to continue and strengthen, and low borrowing costs for yet another month will do no harm whatsoever.”

Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week