Home owners and people with contractor mortgages no doubt breathed a collective sigh of relief yesterday as the Bank of England’s MPC held the base rate at 0.5% for another month.
Policymakers have come under increasing pressure to raise interest rates in a bid to combat inflation. However, it’s possible that the contraction in GDP in Q4 last year led to concerns that an interest rate rise could stifle the economic recovery.
An interest rate rise would have an immediate impact on people with tracker mortgages and other debts such as credit cards. Probably the only people to feel miffed at this latest decision are savers who had been hoping to start to see a better return on their investments.
But what will the mortgage lending companies make of the decision? Some lenders have already been increasing mortgage rates for new borrowers and those wanting to remortgage. The price of the average fixed rate product now stands at its highest for six months.
We are know that interest rates have to rise eventually but for those people thinking of shopping around for a mortgage now, there may still be some good deals around.
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