It is believed the Bank kept rates on hold because of inflationary pressures as a result of growing fuel and food prices. The economy is slowing gradually and experts are calling for a rate reduction next month to prevent further threats of a recession and increase consumer confidence.
The Council of Mortgage Lenders was unsurprised by today’s MPC decision to keep rates on hold at 5%. Michael Coogan, CML director general, commented: “We understand the conflict between slowing economic growth and rising inflationary pressures, and the uncertainty over some of the data reflected in the split views of MPC members last month. However, the MPC had an opportunity to act to anticipate the worsening economic environment today, and it is disappointing that there has been no change.
“Mortgage and housing market conditions will remain challenging for the rest of this year, but the majority of existing borrowers are coping well. Anyone who is in financial difficulty, or thinks they may have a problem in the future, should contact their lender or a debt adviser. The earlier you make contact, preferably before you have any arrears, the more options may be available to resolve the financial problem.”
