BoE rate hold could benefit mortgages
10 December 2009 15:51:06
 |
| The mortgage sector has been aided by low interest rates. |
Policymakers have now held the base rate at the same level, itself an all-time low in the institution's 300-year history, since March.
In late 2008 and early 2009, the BoE reduced the rate from over 5% in an attempt to make borrowing on mortgages and other loans cheaper for consumers and businesses.
Policymakers have also voted for no change to the institution's £200bn quantitative easing scheme, which involves BoE purchases of government and corporate bonds.
Quantitative easing, the modern-day equivalent of printing money, can improve general lending conditions by increasing the amount of cash flowing around the economy.
The last time the size of the programme was changed was in November, when an extra £25bn of asset purchases was announced.
In a sign that the BoE's policies could be having an effect on consumer borrowers, the Council of Mortgage Lenders announced today that the number of loans for home purchase issued in October 2009 reached 55,000.
This is the highest level reached by the indicator since December 2007.
Minutes of the BoE's rate-setting meeting, which will reveal how the nine-member Monetary Policy Committee voted, will be released later in the month.
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