Savers may be hit by interest rate decision

Thursday, July 8 2010

The Bank of England has announced a freeze of interest rates at 0.5 per cent - making this the longest period they have been held during the reign of Queen Elizabeth II, according to John Charcol.

Members of the bank's Monetary Policy Committee (MPC) today (July 8th) voted to maintain the rate.

It could be considered bad news for Brits who are busy saving their cash, with only a small amount of interest to be added to their account.

On the other hand, those who have recently taken out a mortgage or loan may benefit from the decision not to increase their repayment rate.

The bank has now not changed its official interest rate since March 2009, when it was reduced from a previous low of one per cent.

"Since last month's MPC meeting the year-on-year consumer price index has fallen by 0.3 per cent to 3.4 per cent, although the committee had an early indication of this at its June meeting," says Ray Boulger, of John Charcol.