As widely expected, the Bank of England’s monetary policy committee held base rate at 5.25%, following February's drop of 0.25%.
With inflation tipped to rise above 3% by the end of the year, and the next inflation report not due for two months, some forecasters are predicting no change in base rate until May at the earliest. Controlling inflation is a priority for the MPC, and it seems that this may have taken precedence over any concerns for borrowers.
While a further cut would have been welcomed, the announcement was not unexpected but will still come as a blow to many borrowers. With mortgage lenders still struggling with funding issues, and the increasingly rapid withdrawal of many of the best deals, this highlights further the importance of shopping around and acting fast.
Any boost for the housing market is unlikely to come from interest rate cuts in the short term so borrowers will now be looking to the Chancellor for help when he delivers his first budget.