Interest rates remain stable

8th December, 2005

Interest rates are to remain unchanged at 4.5 per cent, the Bank of England has announced today.

The news was widely anticipated by financial analysts, who said that it would have taken a significant change in the current economic climate to justify a change in rates.

With a resilient and buoyant housing market, it seems unlikely that property prices will be affected by the continuation in rate.

Trevor Williams, chief economist, Lloyds TSB Financial Markets, commented: 'Although manufacturing continues to struggle in the face of tough global competition and unemployment is nudging slowly upwards, the economy as a whole continues to grow, inflation is still above target and the housing market seems to be edging towards a recovery.'

Mehrdad Yousefi, head of intermediary mortgages at Alliance & Leicester added: 'The housing market continues to be resilient especially in the last few months with mortgage applications in September and October being higher than market forecasts.

'Looking forward to next year, the market consensus is that any potential weakness in retail sales in the run up to Christmas and during the January sales will factor into future decisions on interest rates.'

 

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