No change to Bank base rate

By UK CreditCards.com

Bank of England base rate

There will be no change to the Bank of England's base rate this month, the institution's monetary policy committee (MPC) announced.

The rate has steadily decreased over recent months, from 5% in October 2008 to 0.5% in March 2009, the lowest it has ever been in the Bank's 315-year history.

By adjusting the base rate, the Monetary Policy Committee (MPC) is able to influence the UK's economy, controlling inflation and other factors. Lending institutions tend to follow the Bank's lead with their own interest rates on credit cards and other financial products. By reducing the rate, the MPC has attempted to encourage banks to lend by making the cost of doing so cheaper.

However, most analysts did not expect a further cut to be announced today and some believe the rate will remain at 0.5% for some time.

"I am expecting next week to be almost a non-event. I think rates will be at 0.5% for the rest of the year and probably quite a long way beyond that," said Howard Archer, chief European and UK economist at IHS Global Insight, last week.

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Published: 16 April 2009