The move was not wholly unexpected following Bank of England Governor Mervyn King’s warning that inflation was once again on the rise.
The National Association of Estate Agents had been one of the most vocal on the subject of a March reduction, with Peter Bolton-King calling for further decisive action off the back of February's rate cut to help put a stop to the current financial turbulence.
Majority of the mortgage industry agrees with brokers that at least one further Base Rate cut is necessary in 2008. However a smaller number have sided with the Halifax, predicting that at least two more cuts will be made by the end of the year.
However dented consumer confidence is still falling, with a fool.co.uk report showing that a sixth of panicked Britons have bought into the current hype, believing the UK has already entered into economic recession.
Bank 'walking a tightrope'
Thursday's decision has been met with a rather mixed reaction from the industry.
Some have praised the rate freeze as the right course of action in the face of rising inflation, however others believe that the MPC's overly cautious approach to interest rates is flawed, and another rate cut should have gone ahead this month.
Kevin Purvey, C&G head of intermediary sales, predicted: “With inflation rising further beyond its target of two per cent, quite a sharp slowdown in economic growth would be needed before the MPC would act to cut rates.
"Given the latest set of figures, it’s clear that holding interest rates is the best way to keep balance."
However David Newnes, managing director of Your Move estate agents argued: “The property market is stable at the moment – but that won’t last without some support from the MPC.
"The recent rate cuts haven’t been enough to alleviate the pressure on banks – we need one more cut to tip the balance.The last two cuts have not been passed onto the borrower yet, a third would have allowed banks to put the borrower first.”
Abbey's chief economist, Barry Naisbitt, added: "I presume that this month the majority of MPC members judged that the most recent evidence of slowing economic activity needed to be balanced against both their expectation that activity would slow and that inflation indicators remain high.
"I expect the balance of views to change as time passes, so that a further rate cut could be on the cards in the next couple of months."
