The Bank of England’s Monetary Policy Committee has voted unanimously to maintain Bank Rate at 0.1%.

In its report, it said that ‘inflation is expected to rise further in the near term, to slightly above 4% in 2021 Q4’. This is well above the 2% that the MPC is tasked with targeting.

The Committee added that developments ‘appear to have strengthened’ the case for monetary tightening – in other words interest rate increases. However, it admitted that ‘considerable uncertainties remain’.

Martijn van der Heijden, CFO at Habito, said: “Despite today’s decision to keep the base rate steady, all arrows continue to point to a rise being on the near horizon.

“Borrowers who are on a variable rate should still consider the impact that any base rate rises this year could have on their mortgage. Even if the rate increases by as little as 0.25%, this could see their repayments shoot up by hundreds of pounds a year, so it’s worth looking at all the options.

“In the coming months, household finances look likely to be squeezed by energy prices, food prices, as well as an increase in National Insurance payments. As such, we’re predicting that longer term fixes become more popular for homeowners, as people try to lock-in more future certainty over their living costs and bills.”

Maddy Alexander-Grout, CEO of the Southampton-based money-saving app, My VIP Rewards, warned: “The country is so unstable and fragile at the moment that even the smallest interest rate rise could tip it over the edge, so to keep rates on hold was the only sensible choice by the Bank of England.

“An increase in interest rates at the present time would decimate sentiment among businesses and consumers alike.”