Bank holds the base rate of interest

The Bank of England has announced that the base rate of interest will be held at 5.75 per cent in October.

The Bank's Monetary Policy Committee (MPC) met today (October 4th) and, as expected, held the rate.

It is the third consecutive month that the base rate has been maintained, which is good news for people with their first mortgage and those with buy-to-let mortgages.

Now a large number of analysts and commentators are forecasting that the MPC will cut the rate before the year is out.

"We did not expect the Bank to cut rates today, but we do hope for and anticipate a cut in November," said Michael Coogan, director general of the Council of Mortgage Lenders.

"Even this is not a certainty though, so borrowers should continue to plan for rates at or around current levels. Pricing in the mainstream market is stable, and fixed rates have started falling recently, but there is still uncertainty about how long it will take for stable funding to return to the sub-prime market.

"In the meantime, borrowers in this sector are facing tighter criteria and higher rates, although the availability of funding does seem to be improving," he added.

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