Interest rates held at five per cent

Aug 7 2008

Bank of England keeps rates frozen for fourth month a row

The Bank of England's Monetary Policy Committee has kept interest rates at five per cent.

Governor Mervyn King and the MPC have now kept the rate steady for the past four months.

The decision did not come as a surprise to many economic commentators with inflation pressures meaning a reduction was unlikely despite brittle economic confidence.

However housebuilders and estate agents were desperate for a cut to help stimulate the slowing housing market.

David Bexon, managing firector of SmartNewHomes.com, said: "With construction figures reported to have plummeted in July and housebuilders being forced to stall sites and cut jobs simply to survive in the current market, the Bank of England’s decision to hold interest rates, yet again, seems a ludicrous one.
 
“Developers are working hard to break down the barrier preventing many potential buyers from entering the market, providing deposits and removing the additional burden of stamp duty across a number of developments.

"However the Government needs to be far bolder in its approach to tackle the long-term challenges facing the UK housing industry and introduce genuinely decisive proposals if it is to bolster what is currently a flagging market."