Bank Base Rate Held

The Bank of England has just announced its decision to hold base rate at 5% for August.

This is the fourth month in a row that the rate has been held, and is a decision that will disappoint homeowners and industry alike.

Opinion had been split over what this month’s decision would be, with strong arguments for both a cut to ease pressure on household finances and boost an ailing economy, and an increase, to reduce the steep climb in inflation.

It’s likely that the Monetary Policy Committee would have been similarly split, as the minutes of last months meeting showed, with one member of the 9 strong committee each voting for a cut and an increase.

With the MPC continuing their difficult balancing act, some experts now feel it’s unlikely that we will see any reduction in rates before 2009, but the latest inflation report due next week, should throw further light on what we can expect over the coming months.

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