The Bank of England’s Monetary Policy Committee (MPC) released the minutes from their November meeting and it revealed that a few members still felt a hike in the interest rate was worth their vote.  Two members, Ian McCafferty and Martin Weale, voted for an increase while the other members, the seven that formed the majority vote, chose to keep the standard base interest rate at the historical low level of 0.5%.

It had been thought that the weaker housing market and other factors would cause the two members that had been voting for an interest rate hike since August to change their course this month.  However, they continued another month voting for an increase of 0.25%.  The minutes revealed that low inflation was an influence on those that chose to keep the interest rate on hold.

The minutes read, “Below-target inflation was judged to be partly the consequence of a margin of spare capacity bearing down on domestic costs and prices.

“A prolonged period in which inflation was below the target created at least the possibility that medium-term expectations of inflation would begin to drift downwards. This had the potential to lengthen the period for which inflation itself would remain below 2%.”

The inflation level rose to 1.3% in October which was only slightly higher than the September level of 1.2%.  The Bank has forecasted that the inflation rate could fall to as low as 1.0% over the next six months.  This is lower than the Bank’s goal rate of 2.0%.

The minutes also revealed that the MPC members voted to make no change to quantitative easing.

There are forecasts that the interest rate could see its first increase in the spring of 2015.  Meanwhile, lenders are still competitive for the attention of homeowners seeking remortgages and home buyers looking for a purchase mortgage.  Their offers have some of the lowest interest rates seen in years.  However, some factors could cause lenders to pull those cheap deals at any time which should trigger borrowers to shop around soon if a remortgage or mortgage with a low interest rate would be beneficial.