Yesterday, the Bank of England’s Monetary Policy Committee (MPC) voted to hold the historically low standard base interest rate at 0.5%. The rate has gone unchanged now for six years having voted in the current low level interest rate in March 2009. The last change was a reduction to 0.5% from the then current low of 1.0%. The response was due to the economic crisis that had an impact worldwide. The Bank also, in March 2009, chose to inject stimulus into the UK economy at the same time, which started with £75 billion and has grown to a £375bn quantitative easing (QE) programme.

Economist at Investec, Philip Shaw, remarked, “On the sixth anniversary of the introduction of QE and near zero interest rates, the MPC left policy unchanged at this month’s meeting.

“While of course it is possible that our medium-term forecasts are blown off course, our central view remains that the committee will begin raising the Bank rate in November this year, about three months earlier than currently factored into the yield curve.”

It had been thought in the later part of last year that the interest rate would be changing in the early months of 2015. The recession is over, the jobless rate is declining, and the economy is one of the strongest in recovery at an annual growth rate of almost 3.0%.

With the quick decline in the cost of oil, inflation was impacted and the target rate set by the bank of 2.0% was surpassed and left the UK after continued declines with a 0.3% record low inflation level. This has led to a dismissal of any warnings of an interest rate change by the MPC in the first three quarters of the year.

Borrowers should not sit back and feel safe on their risky standard variable rate (SVR) interest rates, especially remortgagers for despite the MPC holding steady, lenders are not expected to keep their low interest rate deals throughout the first half of the year. The competitiveness between lenders is coming to a close, the cost of lending is rising, and new regulations are tightening lending practices – all of which will see lenders increasing their interest rate offers long before the MPC walks out of a meeting having voted a change.