No cut in interest rate means steady savings

Thursday, December 8, 2005

The Bank of England has announced that the base rate of interest will remain at its current level of 4.5 per cent, meaning no need for change in the rates for a personal loan, credit card or savings account.

The rate freeze in December also means that there has been no change for the last four months, and the rate will not now change in 2005, something that was widely predicted by analysts and experts.

"[The] interest rate decision by the Bank of England is one of the easiest ever to call, with unchanged monetary policy being a stone-dead certainty," said Howard Archer, chief UK economist at Global Insight.

The Bank of England's inflation report, minutes from the Monetary Policy Committee's (MPC) November meeting and comments from Bank personnel all suggested that rates would be frozen until next year.

No change in the base rate means no change for variable or tracker mortgages, but also means savings income will be predictable during the rest of the year.

The next decision by the MPC will take place on January 12th 2006.

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