MONEY MATTERS with Scott Woods of Bingham-Woods Independent Financial Advisors, Spalding

Staff at Bingham-Woods Independent Financial Advisors, Spalding.  Photo by Tim Wilson.
Staff at Bingham-Woods Independent Financial Advisors, Spalding. Photo by Tim Wilson.
  • No change on Bank Rate or Quantitative Easing Programme
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Bank of England stays still on interest rates

The news will be greeted by savers and borrowers differently but the Bank of England has voted to maintain its base rate of 0.5 per cent, the 73rd consecutive month it has stayed at this level. 
In a statement, the Bank confirmed that its Monetary Policy Committee (MPC) had voted in favour of maintaining bank rates, going against speculation that an increase may be imminent. 
Despite various analysts predicting rises at some stage in 2015, the Bank’s base rate has stayed at 0.5 per cent since March 2009. 
The MPC also voted to maintain its planned quantitative easing at £375 billion, a level that has been maintained since July 2012 when it was increased by £50 billion. 
This move was generally warmly received by the markets, with Legal and General director Stephen Smith describing the result of this month’s MPC vote as unsurprising. 
But Mr Smith added that the consistency of the Bank’s base rate does not mean consumer interest rates aren’t still changing. 
He said: “Banks don’t just look at the base rate when deciding the rates they offer to consumers. 
“They also look at swap rates which can be very volatile, for example, the average rate offered on a two-year fix has fluctuated by 1.4 per cent over the past three years and the average five-year fix has moved by 1.3 per cent in the same period. 
“At the moment, there are some very competitive deals around and anyone who is thinking about moving house or who is coming to the end of a mortgage deal should speak to a broker now about which deal would be right for them. 
“Those who wait until interest rates start to rise risk missing out on the best deals as bank will raise their rates long before the Bank of England makes an announcement.”

Money Matters with Scott Woods.

Money Matters with Scott Woods.

‘Banks don’t just look at the base rate when deciding the rates they offer to consumers - they also look at swap rates which can be very volatile.’

Stephen Smith, director of Legal and General’s mortgage club and housing businesses