The Bank of England has faced calls by the financial industry this month to cut interest rates after they held the rate at 4.5% for the seventh consecutive month last month. They have not lowered rates since the 0.25% cut in August 2005, and many people in the mortgage market would like to see a reduction in the spring.
Both Alliance & Leicester and the Royal Institute of Chartered Surveyors believe that there should be a cut in the near future, but consider the decision to leave the rates unchanged, is the right decision for now, as there is renewed confidence in the economy and there has been an 'upbeat start to the year'.
Our view
We believe interest rates should remain as they are, a cut in interest rates will fuel another property cycle which is not welcome until wages catch up with property prices.
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