Following the shock interest rate rise in January, when the Bank of England moved to curb inflation earlier than expected, industry commentators found February’s decision particularly hard to call.
Ray Boulger, senior technical manager at John Charcol, commented that the Consumer Price Index and Quarterly Inflation Report were key to the MPC’s decision. “The hold in rates suggests the Bank is a bit more relaxed about short-term inflation. There are factors on the horizon that will help inflation, such as energy prices falling in the next few months, and there are also signs that house price inflation is starting to fall.”
Mehrdad Yousefi, head of intermediary mortgages at Alliance & Leicester, said: “This will come as a welcome relief to borrowers, but many analysts will view this latest decision by the Bank as a mere delay of an inevitable further rate rise.
“It is very likely we will see another rate rise in the first half of 2007, so it’s crucial borrowers assess the impact any rises could have on their finances.”
