Interest rates kept 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 di...