Mehrdad Yousefi, head of intermediary mortgages at Alliance & Leicester, said: "Following last month's rise in the Bank of England Base Rate, which took some commentators by surprise, a further rise in September was not anticipated. The decision to maintain rates this month comes against a backdrop of a generally healthy economy, with stronger than expected retail sales data and consistently robust mortgage lending figures with the Bank of England forecasting economic growth above trend.
"However, the economy is still facing inflationary pressures due to higher energy prices and most commentators now predict another increase before the year is out.
"Despite the recent hike in interest rates, fixed rate mortgages still offer great value for money and are ideal for those who are on a tight budget or who simply prefer the security of knowing their payments won't change during the term of a deal. For those who prefer variable rate deals such as trackers and discounted mortgages, these are still priced around 0.5 per cent cheaper than fixed rates."
