Fri, 11 Jun 10
The Bank of England’s (BoE) monetary policy committee has kept interest rates at the record low level of 0.5%.
Interest rates have been at this level since March 2009. The BoE also announced this week that it had not injected any more money into the UK economy through its quantitative easing policy.
David Brown, LSL property services commercial director, said: “It’s a relief to see that the MPC have held their collective nerve and kept interest rates low. Following the recent jumps in inflation, there were fears we might face an interest rates hike sooner rather than later. But kicking up interest rates would be a step in the wrong direction for the housing market and threaten the stuttering recovery of the lending market.
“For property investors, mortgage finance remains a fundamental obstacle. Raising interest rates would only exacerbate the problem.”
A poll of economists released by Reuters this week shows widespread belief that interest rates could remain on hold until next year.
Europe's ECB also chose to keep the base rate steady at 1.0% this month. Looking forward the now widening sovereign debt crisis could force the hand of the central banks to raise base rates before too long.
By Joe Lepper
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