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The Bank of England’s Monetary Policy Committee (MPC) held its usual monthly meeting yesterday to discuss, amongst other items, the level of the base rate of interest for loans and savings for the coming month.

Despite calls from one member of the MPC, Andrew Sentance, to increase interest rates for several months now, it was decided that the cost of a loan and the return on savings would remain unchanged, with the base rate staying at its historically low level of just 0.5 per cent.

The news does not come as any great surprise to financial experts, who mostly expected to see no change in the rate. The base rate has now remained at 0.5 per cent for a total of 19 months, which is the longest period without any alteration since the Second World War.

Those borrowers who currently have their home owner loan on a variable or tracker rate loan deal, will breathe a sigh of relief for yet another month, whilst those who opted for a more expensive fixed rate loan in order to avoid rate rises, may be slightly kicking themselves.

Ray Boulger of home owner loan brokers John Charcoal said “The authorities can now draw on the lessons of the 1930’s and have more tools at their disposal now and so there are reasonable grounds to expect the current period of austerity will be shorter.”

“However, there is a real danger that policy mistakes such as over exuberant mortgage regulation in response to past regulatory failure will drag the economy down further and hence delay the recovery.”

“This all adds support to our view that the bank rate will remain low for a long time and when it does start to rise the increases will be slow.”