There was a little bit of good news yesterday, for all those home owners in the UK who are struggling to pay off their personal loans and credit card bills after their Christmas overspending, when it was announced that the base rate of interest for loans and savings was to remain on hold for another month.

The announcement was made following the regular monthly meeting of the Bank of England’s Monetary Policy Committee (MPC), when it was decided to keep loan rates on hold and also not to extend the current programme of quantitative easing.

The base rate of interest will therefore have remained at its historically low level of just 0.5 per cent for a total of 34 months now, since March 2009, when most people thought that the cheap loan rate would only last for a very short time.

Although the level of quantitative easing has remained at £275 billion for the time being, it is widely expected that this will probably be extended next month, as the Euro zone crisis deepens.

The announcement that the base rate of interest was to stay unchanged has come as no surprise to financial experts or borrowers alike, many of whom are now taking cheap loan rates for granted, as the current level of inflation is still well above government target figures and the UK economy is too fragile to tolerate a rate rise just yet.

Ben Thompson of Legal & General Mortgage Club said “The Christmas period and start to the New Year kicked off with all manner of negative predictions and forecasts, however there have been some glimmers of hope as well. These glimmers are just that and there is a long way to go before ay fiscal tightening is required.”

Similar Posts: