Base rate likely to be frozen

The majority of major financial institutions believe that the base rate of interest is set to remain unchanged in March.

A new poll of eight institutions revealed that all of them anticipate rates being frozen when the Bank of England's Monetary Policy Committee (MPC) meets next week.

The MPC is due to meet on March 6th and mortgage lenders across the UK will be hoping that a reduction is announced.

However, it appears that they will have to make do with rates at their current level of 5.25 per cent.

"Markedly faltering UK growth and the very real risk of a sharp economic downturn mean that further interest rate cuts are clearly on the Bank of England's agenda," said Global Insight economist Howard Archer.

"Nevertheless, next week's meeting of the Monetary Policy Committee is highly likely to prove too soon to yield the next 25 basis point interest rate cut to five per cent given current elevated inflationary pressures," he added.

Borrowers have already benefited from two 0.25 percentage point rate cuts in the last three months.

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