Base rate remains at 0.5% - 4th February 2010

“By the time the Bank of England reviews the base rate again next month it will have spent a full 12 months at an unprecedented low of only 0.5%”, says Simon Gammon, head of Knight Frank Finance, which specialises in mortgages over £1m.

“The bank’s decision today to keep rates on hold at 0.5% was expected, but rates could rise earlier than many have been predicting as inflationary pressures grow following an increase in the CPI last December to 2.9%. 

"Some commentators are now forecasting a rise as early as next month, although disappointing recent UK growth figures – GDP grew only 0.1% in the final quarter of 2009 -  may temper this sentiment.

"I’m not sure the Bank of England will want to jeopardise the UK’s fragile economic recovery by raising rates that soon, but I do believe that now is the time for people to really look at the benefits of fixing their mortgage.

“Five-year fixes are still available for under 5%, but lenders are already starting to increase their standard variable rates in anticipation of changes to the base rate. 

“A number of lenders allow borrowers to book fixed-rate mortgages up to six months in advance at today’s rates, so this may be worth considering. There are often cost implications of doing this so taking professional advice is crucial."

For further information, please contact:

Davina Macdonald Lockhart, associate,