8 May

Bank of England holds interest rates

Bank of England holds interest rates

Mortgage rates are set to remain at the same level following the Bank of England's decision to hold interest rates at five per cent this month.

Analysts had predicted such an outcome, with all nine of the experts polled by Adfero last week and 60 out of the 65 economists polled by Reuters forecasting that the Bank would hold rates.

If the current pattern of bi-monthly rate cuts is continued, the Bank's monetary policy committee should reduce interest rates by a quarter point in June, which borrowers will be hoping get passed on to them.

According to the Council of Mortgage Lenders (CML), 90 per cent of cuts between August 2007 and March 2008 were passed on.

The CML has expressed its disappointment that the Bank did not lower interest rates this month, although it did acknowledge that it faces difficult balancing act between a slowing economy and rising inflation.

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