Last week the Bank of England’s Monetary Policy Committee (MPC) voted unanimously to keep the standard base interest rate at the historic low of 0.1%. In historic, it means in over 300 years the rate has not been lower. It was expected that the MPC would keep rates steady, despite the continued impact of the pandemic on the economy. Covid-19 vaccines are being distributed and that is expected to raise confidence as well as allow businesses and people in general to move back toward a more stable lifestyle and support the economy.

However, the Bank of England has warned that the MPC might have to intervene in the months ahead should the need arise. Despite an optimistic outlook at the effect of the vaccine diluting the pandemic, the economy might struggle and come to face unexpected complications in the recovery.

The Bank noted there could be a rapid recover in the GDP towards economic levels more in line with those seen pre-pandemic.

The Bank’s forecast for the months ahead was stated as “unusually uncertain, and that it depends on the evolution of the pandemic, measures taken to protect public health and how households, businesses and financial markets respond to these developments”.

In response, Nick Chadbourne, chief executive of LMS, remarked, “It’s no great surprise that Bank Rate remains at 0.1%, and it’s good news for homeowners as it keeps mortgage rates down.

“LMS data shows that on average, borrowers taking advantage of low rates decreased their monthly payments by £236 in December.

“Recently we’ve seen lenders prepare for a busy remortgage market in Q2 with a steady stream of high loan-to-value products returning to the market and the introduction of increasingly competitive rates.

“While product transfers can offer a great deal in terms of ease and efficiency, as competition between lenders grows, borrowers should be seeking advice to ensure they are accessing the best deals available on the market.”