The Bank of England took a lot of people by surprise last week, by voting to maintain the Base Rate at 0.50%.
Attention has now turned to the next Monetary Policy Committee meeting, on the 4th August. Experts in the Times warned that more lenders could increase rates on their tracker mortgages in anticipation of a base rate cut, but also highlighted the recent cuts in longer term fixed rates. The Financial Times suggested that, as speculation continues, buyers might be tempted to delay their purchases until after the next announcement.
The Sunday Telegraph took a longer term view, assessing the issues that could promote, or delay, an eventual increase in the Base Rate. Many of us will never have experienced a rise in rates, so the Bank of England will no doubt be wary of an increase coming too early or too quickly. On the other hand, keeping rates lower for longer could mean consumers need to set more money aside for savings, and spend less. There is a suggestion therefore that the Bank may decide that the UK economy could benefit from higher rates.
What the papers said about the Bank of England Base Rate