Belfast Telegraph

Interest rates set to stay at record low

By John-Paul Ford Rojas

Interest rates were kept at their historic low of 0.5% as mounting pressure to cool the housing market failed to persuade the Bank of England to change course.

The announcement was widely expected as policymakers have said they would rather utilise other tools to curb any property bubble before acting on rates, which would only be deployed as a "last line of defence".

The decision came as latest figures from Halifax showing a second consecutive month-on-month fall in house prices in April – though they were 8.5% up year-on-year – looked likely to ease concerns about an overheating market.

The bank rate has been at the historic low of 0.5% for more than five years to nurse the economy back to health, with a recent period of falling inflation easing pressure on its monetary policy committee to act.

With recovery gathering pace, policymakers have made clear they want more of the "spare capacity" in the economy taken up before any hike, leading to expectations of a first rise next spring.

Belfast Telegraph

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