Interest rates on hold again

Earlier this month saw the September Monetary Policy Committee meeting took place, and following the monthly meting the Bank of England has announced that the UK base interest rate is to be kept on hold for yet another month, staying at its all time low level of just 0.5 percent.

Many economist and industry experts had predicted that there would be no movement in the base rate, and some have predicted that this will be the situation for the remainder of this year and part of next year.

In addition to announcing that the base rate would remain on hold the central bank also confirmed that at present there were no plans to further expand the quantitative easing programme, which has already exceeded its original £150 billion allocation, having gone up to £175 billion after a shock announcement last month that a further £50 billion would be pumped into the economy through QE.

One economist said that there was a good chance that the central bank would now keep QE on hold for the next few months, and may consider extending again towards the end of the year based on the state of the economy.

He said: ‘Having extended the programme only last month it would have been very surprising if they’d felt the need to extend again this month. I expect they’re on hold until November. Our guess is that they may extend again in November.’

With regards to interest rate movement on industry official said that if the economy does improve over the remainder of this year the first increases in the base rate could be seen early next year.

He said: ‘If the economic data continues to improve, we could see the first interest rate hike in the first quarter of next year.’

Tags: mortgage rates, hike, bank of england, easing, place