Bank of England holds interest rates at all-time low
The Bank of England’s Monetary Policy Committee (MPC) has voted unanimously to maintain Bank Rate at 0.1% – its lowest ever level.
It said it expects GDP to rise sharply in the second quarter of 2021, and recover strongly to pre-Covid levels over the remainder of this year assuming restrictions are lifted as planned.
But it added that the outlook for the economy remains uncertain, saying ‘it continues to depend on the evolution of the pandemic, measures taken to protect public health, and how households, businesses and financial markets respond to these developments’.
The Bank of England said the Monetary Policy Committee doesn’t plan to increase Bank Rate ‘at least until there is clear evidence that significant progress is being made’ in achieving the 2% inflation target.
Twelve-month CPI inflation rose from 0.4% in February to 0.7% in March.
What does it mean for borrowers?
Those on a variable rate mortgage shouldn’t see any change to their pay rate as a result of today’s decision.
This is good news, as mortgage rates remain at low levels across the board. Fixed rate borrowers are protected from any changes to interest rates movements until the end of their agreed period.