BoE holds interest rates at 5%

The news comes as little surprise to market commentators as the MPC seeks to prevent the rising cost of food and fuel from forming a long-term pattern of wage-price spirals. The development will bring little cheer to borrowers, many of whom are already facing high interest costs on mortgages and unsecured debts. However, some have doubted whether the Bank of England can continue to influence lending rates as average two-year fixed rates rose above 7% despite rate cuts in the first half of the year. Further news from the Halifax that house prices have fallen 2% in June will also add to th...