Interest rates held at 0.25% for August
The Bank of England’s Monetary Policy Committee has voted 6-2 in favour of maintaining rates at their current level of 0.25%.
It has now been a year since the MPC voted to reduce its Base Rate to its lowest ever level and 10 years since it last increased interest rates.
In a statement the Committee said that, given the assumptions underlying its economic projections, ‘some tightening of monetary policy would be required to achieve a sustainable return of inflation to the target’.
In other words, they expect to increase rates, but noted that it would be at a gradual pace.
David Lamb, head of dealing at FEXCO Corporate Payments, said: “With the Bank’s Inflation Report predicting both a slowdown in economic growth and continued rising inflation, the doves are now set to rule the roost for the foreseeable future.
“Translation – we shouldn’t expect an interest rate rise at least until the start of 2018.”
This is good news for variable and tracker rate mortgage borrowers who should see no imminent changes to their pay rate, although of course the only to guarantee your monthly repayment is set in stone is to fix your rate.