After three increases last summer, the decision has been praised as a wise one to see how January’s increase will continue to affect the market.
Chief economist at EEF, Steve Radley commented: “The Bank is right to hold its fire until the smoke clears and the impact of the recent rises becomes clearer. Another rise so soon after the last risks spreading unnecessary alarm amongst business and the consumer.”
The housing market is resilient despite these efforts, and a further rise has definitely not been ruled out -with most people expecting another before the year is out.
Mehrdad Yousefi, head of intermediary mortgages at Alliance & Leicester comments: “Today’s MPC decision to maintain the base rate at 5.25 per cent will come as a welcome relief to borrowers, but many market analysts will view this latest decision by the Bank of England as a mere delay of an inevitable further rate rise.
“Inflationary pressures on the economy remain strong, including some above inflation pay deals, and they will play a key part in future base rate decisions. The consensus of opinion is that it is very likely that we will see another rate rise in the first half of 2007, so it is crucial that borrowers assess what impact any possible future base rate rises could have on their finances."
