Bank of England maintains rate
Published On 9 March 2007
The monetary policy committee of the Bank of England has decided to maintain the base rate of interest at 5.25 per cent.Few were surprised at the decision, despite the fact that the inflation rate currently stands at 2.7 per cent.
The last change to rate came in January, when, to the surprise of many, the MPC raised the rate to its current level.
Ray Boulger, an adviser at independent mortgage adviser John Charcol, said: "This decision, whilst expected, suggests that when the February Consumer Price Index is published next week it will not contain any nasty surprises.
"Some more positive news over the last month on the factor the monetary policy commitee is expecting to be particularly material in bringing inflation down later this year has been the confirmation from some gas and electricity suppliers not only of further significant falls in prices but also reductions being implemented earlier than had been expected."
Since August, the interest rate has been raise by a total of 75 per cent of a point, in an effort to combat the rising inflation, which has risen significantly over the target of two per cent.
In December, inflation rose to three per cent, but then declined again in January.
Many analysts are predicting that the monetary policy commitee will leave the rate as it is for the next few months while gauging the effect of the January rise.
