As the week takes shape the Bank of England’s Monetary Policy Committee (MPC) will be gathering for their September meeting, the last month of Q3, to decide on whether to hold the current standard interest rate as is or change it.  There had been many rumors that there was a possibility of the interest rate being taken from the current 0.5% level to 0.25%.  It is thought that the rumors were perhaps partially to blame for the lack of demand in remortgages despite the currently cheap deals on the market.

Those hoping to see the MPC lower the interest rate further are likely to wait a long time and September will definitely see a hold of the Bank’s rate at 0.5%.  There is not an expectation of any further quantitative easing into the economy either.  The programme will therefore remain at £375 billion with a possibility of it growing later in the year.

The response from the Bank was not to lower the interest rate to make borrowing cheaper as rumors told but instead they put into place the Funding for Lending scheme.  It was to help keep lending available and affordable by funding lenders through the Government at low rates rather than lenders having to gain funding from the more costly global market.  The impact is expected to be revealed in the coming months but already lenders have responded by offering more attractive deals.  Some remortgages and mortgages have been offered below 3% to those able to secure loan to value levels of 40%.  While the cheapest deals are reserved for those with higher deposits and equity levels there are still very attractive deals across the board in the remortgage lending sector and homeowners should shop around versus waiting on rumors to materialize on a lower rate from the MPC meeting.