Loan Rate Remains On Hold
The Bank of England announced yesterday that the base rate of interest for loans and savings was to remain at its current low level of just 0.5 per cent for yet another month, which will come as a welcome relief for many borrowers with a large home owner loan or mortgage balance.
The decision was announced yesterday (13th January) lunchtime, following the regular monthly meeting of the Bank’s Monetary Policy Committee (MPC).
The base rate of interest has now remained at just 0.5 per cent for a total of 22 months, in order to help economic recovery in the UK and those people with a home owner loan or mortgage on a variable or tracker rate.
Whilst the news will be unwelcome for those people with savings, a large number of borrowers will undoubtedly breathe a sigh of relief for another month, particularly those with a variable rate loan, as an increase in monthly loan repayments could just be enough to push many borrowers over the financial edge.
Despite the good news and support for loan customers, there is mounting pressure to increase the base rate sooner than originally anticipated. One member of the MPC, Andrew Sentence, has been calling for an increase to the loan base rate for several months now and with inflation currently running at the high level of 3.3 per cent, there is a strong argument for increasing the base rate.
However, due to the fact that the base rate has been kept on hold once again, coupled with the fragile nature of the UK economy, many financial experts are now predicting that the base rate and therefore the cost of a typical home owner loan, will remain at this historically low level until the end of this year at least.
