March 2013 will not be the month to go down in history as marking the end of the long term and historically low standard base interest rate currently in place.  The Bank of England’s Monetary Policy Committee (MPC) has chosen to leave the interest rate set by the regulators at 0.5% for yet another month.  The decision was expected with the weak economy and slow growth seen since the first recession.  The current standard base interest rate has been left at historic low levels for four years.

The MPC also chose to leave the economy as is without any assistance through injected stimulus by offering more quantitative easing (QE).  This decision was unexpected by many due to the call by some economists that the economy was in need of yet another injection of QE.  Last month during the MPC meeting there were three MPC members that voted to increase the QE programme by £25 billion but they were outvoted by the majority.  It was expected to be a greater possibility this month but others expected the MPC to await further economic data before choosing to increase the current QE level beyond the current £375 billion.

The MPC’s decision to let the current standard base interest rate remain at 0.5% should have little impact on the mortgage lending market.  The Funding for Lending Scheme put in place last year to keep funding flowing to borrowers and at low interest rates has helped bring buyers back to the housing market and that trend is expected to continue.  There has also been a recent increase in the number of homeowners seeking remortgages due to the low interest rates being offered by lenders.