Loan Rates Kept On Hold Again

The news may now seem as though it becoming a little bit repetitive, but the Bank of England has decided to keep the base rate of interest for loans and savings at its current historically low level of 0.5 per cent for yet another month.

In its usual monthly meeting yesterday (Thursday 7th April), the Monetary Policy Committee (MPC) of the Bank of England voted to keep loan rates at 0.5 per cent for another month. This means the base rate of interest for home owner loans has now been at this level for a total of 25 consecutive months.

There has been much speculation from financial experts in recent months regarding when rates are likely to rise, with many predicting May this year for an initial increase in the cost of a variable rate home owner loan, although with inflation now running at 4.4 per cent, some had expected the possibility of a rate rise this month.

However, to counter inflationary pressures on interest rates, poor growth figures for the UK economy and high uncertainty over the coming months has prompted the MPC to keep rates on hold for now, as any increase to the cost of people’s home owner loans and mortgages could have a hugely damaging effect on any signs of economic recovery.

Earlier predictions for a rate rise in May are now largely being put back to August or even September, which will undoubtedly give borrowers with large home owner loans a little more time to switch their loan and allow them to breathe a sigh of relief for a little while longer.

Meanwhile, many borrowers with variable rate loans are taking advantage of the low loan rates and overpaying on their home owner loan to help cushion the blow when interest rates do eventually increase later this year.

News Source:-http://www.bestloans.co.uk/