Interest rates held at 5.25%

The rate freeze was widely expected by market analysts as the MPC has continued to show concern over rising inflation. The Bank of England’s latest inflation report acknowledged the role rate cuts could play in stimulating the economy, which is expected to see a marked slowdown this year. However, the report also showed inflation could rise above 3% by the end of the year, forcing the Bank’s Governor, Mervyn King, to write a letter of explanation to the Chancellor. The news will be disappointing for homeowners, 1.8m of which are due to see their fixed-rate mortgage deals end, meaning ...