Another Month of Remortgage Deals with a Low Interest Base Rate
The Bank of England’s Monetary Policy Committee released their minutes from the March meeting. It was looked upon with great interest to see how close the committee was in hiking the interest rate up from its long time 0.5 per cent. The rate has now gone more than 2 years unchanged which has been well received by borrowers.
The minutes revealed that for the second month in a row there were three members that sought an increase in the interest rate. Andrew Sentance the member who has long voted for an increase once again sought a hike of the rate to double it to 1.0 per cent. Spencer Dale and Martin Weale both voted for an increase of 0.25 per cent to bring the rate to 0.75 per cent. The fact that the 6 to 3 vote to leave the rate unchanged occurred was not unexpected by economists that have forecasted the earliest date for a change will be May. "It's broadly as expected," said Ross Walker, of RBS Financial Markets. "We didn't expect any more dissenters this month. It's the same dilemma, weighing up competing risks of rising inflation versus still weak activity numbers." And Howard Archer, chief European and UK economist for IHS Global Insight, added: "Latest developments do little to clear the fog surrounding exactly when interest rates will start to rise. "Indeed, the minutes concluded that recent developments had increased the uncertainty over both the growth and inflation outlooks, with higher oil prices from events in the Middle East and Africa adding both to near-term upside inflation and downside growth risks."