The Bank of England’s Monetary Policy Committee has voted to hold interest rates at 0.5% for the 17th consecutive month. The MPC also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200bn.
MPC member Andrew Sentence has voted for a rise in interest rates for the last two months but the other members have all voted to maintain rates.
I am not totally surprised that interest rates have been held at 0.5% as I believe are economic recovery is still fragile and would expect to see low interest rates for the next 3 years.
One thing that we and specifically business owners need to be mindful of that average interest rates are around 3% and we should not get tricked that interest rates of 0.5% is normal because its not.
If you are taking out new finance its a good idea to stress test the loan repayments to see what would happen if base rates 3 or 5% this will arm you with information about what could happen in the future.