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Bank base rate frozen again
The Monetary Policy Committee (MPC) voted to freeze the bank base rate at 0.5 per cent for the 18th month in a row yesterday (September 9th).
As the base rate remains at its current historic low speculation is building about the likelihood of a change in the near future.
Barry Naisbitt, chief economist at Santander UK, said that the minutes of past MPC meetings have revealed that at least one member of the committee has voted for an increase.
He added: "With inflation still above the two per cent target, although it did reduce to 3.1 per cent in July, and strong GDP growth of 1.2 per cent in the second quarter but some concerns about a weakening of growth ahead, it seems likely that the MPC vote will again have been split in September."
Ray Boulger of John Charcol mortgage advisers, believes that a chicken and egg situation is developing as the MPC wait for signs of economic improvement and consumers wait for a clearer picture to emerge before spending.
The last change made by the MPC was in March 2009 when they voted to decrease the base rate by 0.5 per cent lowering it to the 300 year low figure of 0.5 per cent.