Last Thursday saw the usual monthly meeting of the Bank of England’s Monetary Policy Committee (MPC), during which the base rate of interest for loans and savings is decided for the coming month, taking into account all the other factors which have an impact on the UK economy as a whole.

It was no great surprise to anyone at all that the MPC voted to keep the base rate at 0.5 per cent, the same level it has stood at for the past three months now and it looks as though it is likely to remain at this level for a few more months yet.

This means that those borrowers who have a tracker, or standard variable rate of interest on their mortgage or homeowner loan, will not see any change in the level of their monthly repayments, but should make the most of the currently low interest rates to reduce their outstanding loan balance through overpayments, before the rate increases again.

In the meantime, the Bank of England is continuing with its strategy of quantitative easing and purchasing bad credit loan debts from banks and building societies. This programme is expected to take another month to complete, at which time the bank should have a clearer picture of the level of success of the scheme, although it seems to be working well at the moment.

It is likely that interest rates and therefore the cost of loans will increase once the economy starts to recover, but at the moment things still look uncertain and although we have seen the first signs of recovery in the housing and homeowner loan markets, other areas of the economy still appear to be quite depressed, which will slow a full recovery and therefore hold rates at a lower level for some time yet.