The Bank of England’s Monetary Policy Committee (MPC) has once more voted to leave the standard base interest rate steady at the historically low level of 0.5%.  The July meeting’s conclusion was not a surprise to economists but there still remains the warning that this will not continue to be the state of the MPC meetings for as early as the end of the year or in the beginning of next year the interest rate should begin to rise.  It is expected to rise slowly but steadily.  Borrowing will become more expensive as the low interest rates now offered on mortgage and remortgages disappear perhaps forever.  Not again should the economy see the low rates currently offered.

The MPC stated that they believe there is still time to allow the economy to grow with cheap lending available before the rate must rise and when it does happen it will do so gradually.

There has been much talk of the rising house prices needing to be halted through higher lending rates, but a natural correcting may have occurred as buyers walked away from higher property asking prices.  Many house price indexes are reporting a decline of the average UK house price in their recent data.

The current Bank rate of 0.5% has been in place and unchanged since March 2009.  The tone of the MPC meeting will be reviewed when the minutes are released on July 23.  Then economists will make their own predictions as to the state of the committee and how close they may be to begin changing their votes from no change to a possible increase in the interest rate.

Homeowners seeking or considering a remortgage should be aware that lenders are not reliant on the Bank to make changes to their own offerings.  Many have already started to pull their cheapest offerings in response to the new guidelines for lending put in place by the Mortgage Market Review established in April.