Bank Base Rate held at 0.5%

The Monetary Policy Committee of the Bank of England has voted to maintain the Bank Base Rate at 0.5% for the 10th consecutive month.

The Bank of England also announced that there will be no extension to the £200bn Quantitative Easing programme, designed to pump more liquidity into the economy.

The historically low interest rate has been attributed with helping to prop up the housing market and confidence in the wider economy, as people’ mortgages have remained relatively affordable since the Bank’s policy of Base Rate cutting began at the end of 2008.

However, some experts are now warning that interest rates will have to start rising at some point this year.

Nick Hopkinson, director of Property Portfolio Rescue (PPR), said: “While the Bank of England has chosen to take no action this month, it won’t be able to continue to do so indefinitely as it strives to manage the consequences of its recent fiscal policy.

“The problems of national debt and monetary tightening aside, the Bank will soon be forced to raise the Base Rate as the money poured into the economy via the Quantitative Easing programme drives up inflation and causes yet another investment bubble.

“This time bomb will inevitably cause significant pain for many households as mortgage and borrowing costs increase again against an already troubled backdrop of unemployment and higher taxes.”