The Bank of England's Monetary Policy Committee (MPC) has voted to keep interest rates steady at 5.5%.
In December, the MPC lowered rates by 0.25% from 5.75% with a unanimous vote after fears that high interest rates could severely curb consumer spending and cause a recession.
Many market commentators expect another rate cut in early 2008, with rates widely expected to fall to 5% by the end of the year.
The news will come as a blow to homeowners that need to remortgage in the coming weeks.
Many borrowers are on fixed-rate mortgage deals negotiated two years ago and are facing much higher monthly mortgage payments when these deals expire.
Following the decision, Duncan Samuel, managing director of Convex.net says: “Around the country we can see that buyers and lenders are far more cautious and this is hitting the housing market. It is clear that this is a trend that is more than just a blip and an interest rate cut would have been very welcome. I can’t see the Bank being able to resist calls for a cut next month.”
Talk of a possible recession in the US, and the knock-on effect on the global economy, have raised hopes of an interest rate cut, particularly as inflation figures have remained stable at around 2.1%.
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