The Bank of England’s Monetary Policy Committee voted by a majority of 7-2 to maintain Bank Rate at 0.75%.

In its report it said that the UK economy slowed last year because firms’ uncertainties about Brexit reduced their spending, and growth in the world economy slowed. UK inflation fell back below 2%.

But the latest economic data showed that uncertainty facing businesses has fallen, and global growth has stabilised, plus the Committee said it expects global growth to pick up further. If that happens, it should help to support growth in the UK.

Potential rate cut

If this expected growth does not happen, then interest rates may need to be cut to support UK growth.

But if, as expected, the economy develops as the Bank of England expects, then upward pressure on prices should build gradually over the next few years. In that case, a modest increase in interest rates may be needed to keep inflation at the 2% target, said the Monetary Policy Committee.

What does it mean for borrowers?

The Base Rate affects wider interest rates, including mortgage rates. The fact it has been held at 0.75% this month means existing variable rate borrowers are not likely to see their pay rate change.

Fixed rate borrowers are already protected from rate changes for the agreed duration of their fixed period.