The decision by the Bank of England Monetary Policy Committee last week to leave interest rates at 3.5% has not raised many eyebrows. After the 0.25% cut last month, many industry commentators were expecting the decision to hold rates at 3.5%.
The Committee's reasons for leaving the rate unchanged will not be known until 20 August when the meeting minutes are released.
Our View
Whilst interest rates are currently low and stable, this will continue to be good news for borrowers but worse news for savers and those that need to generate an income from their capital.
In terms of an overall outlook we believe that there is unlikely to be significant interest rate changes before Christmas. However, when the New Year starts a base rate rise may well be on the cards.