The Bank of England’s Monetary Policy Committee has voted to keep interest rates at 5.25%...

The decision was  in line with analyst and market expectations, though the National Association of Estate Agents recently urged the Bank to consider lowering the rate to 5% in a bid to help FTBs onto the property ladder.

David Kern, economic adviser to the British Chambers of Commerce believes the decision was predictable: "The decision is not surprising, but we believe the decision is mistaken, given the worsening international and domestic situation.

No surprise and wise

EEF chief economist Steve Radley noted: "Unless the evidence shows the economy slowing faster than expected, the Bank should continue to reduce rates gradually."

This view was echoed by Graeme Leach, Chief Economist at the Institute of Directors (IoD), who called the decision "No surprise and wise", adding: "The last thing the economy needs is for an overly aggressive easing in policy now, which has to be reversed later in the year."

Stuart Law, Chief Executive of Assetz, lambasted the Bank of England for ignoring what he described as a ‘clear and present danger’: “Delaying a base rate reduction allows the credit crunch to gain ground. We are again seeing a tightening up in the credit markets and action today was much needed. I would strongly urge the MPC to agree a full 0.5% drop at next month’s meeting.”

BoE 'out of touch'

Mike Ratcliffe, Chief Executive of Wolsey Securities, villified the BoE for not facing up to the realities of the UK housing market: “Today’s decision to maintain interest rates, while it will not be a surprise for many, sends out a message that the MPC is not in touch with the realities affecting the UK housing market, where it is reported that planning applications coming through the system have already dropped by over a third. 

“Given a robust housing market is central to economic stability of the country, it is essential that the Bank of England recognises the need for further rate cuts next month. The danger is that reluctance to act will increase the chances of the country taking itself into a recession, which will be a tragedy, leaving the Government’s aspirations for three million homes by 2020 will be in tatters".