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Mortgage holders benefit from interest rate stability

Date: Thu, 21 Apr 2005

The Bank of England's Monetary Policy Committee (MPC) voted 7-2 to leave interest rates at 4.75 per cent in a move that will please most mortgage holders.

The minutes of the MPC's meeting at the start of April showed that the committee had largely decided to keep rates stable amid continued uncertainty over slow consumer spending and concerns over consumer prices.

However, MPC members Andrew Large and Paul Tucker did vote for a rate rise to five per cent, arguing that the housing market remained firm despite a slowdown in activity and that a quarter-point rise in interest rates now "would help to contain medium-term inflationary pressures".

Yet their argument was rejected as the remaining committee members argued that such a rise would be an unwelcome surprise to financial markets.

It was the eighth month in a row that the MPC voted to keep rates unchanged.

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