Interest rates set to stay at historic low

The Bank of England is unlikely to raise interest rates in the near future, which is good news for homeowners.

September 19, 2012

The latest minutes of the Bank of England’s monetary policy committee shows that there’s  little prospect of any rise in interest rates in the near future.

All 9 committee members  voted to keep the Bank of England base rate at 0.5%, with none arguing that it should go up, despite concerns admitted by the Bank that it may struggle to bring down inflation as predicted.

The committee even considered taking extra measures to give an extra boost to the economy on top of the asset repurchase scheme currently underway.

Members were said to feel ” less optimistic about the prospects for bringing down inflation than in August based on rising oil and food prices and headwinds from the eurozone crisis”. And as a result, members voted to continue with the asset allocation programme at its current level, and some urged the bank to adopt an additional stimulus package.

So reading between the lines it seems clear that there is no appetite for a rise in interest rates within the Bank of England any time in the near future, which should provide some comfort to homeowners.