The BoE voted yesterday to keep UK interest rates at 5%...

The MPC's decision came despite widespread worries about the state of the UK economy amid a global slowdown.  However, rising fuel and food prices means that there are still worries over controlling inflation.

David Kern of the British Chambers of Commerce (BCC) argued was not impressed: "This decision was a mistake given the serious threats to economic growth”.

Ian McCafferty, chief economic adviser to the CBI business group, was not surprised by the decision: The Bank faced a difficult decision, but it is no surprise that rates were kept on hold this month. The latest data shows the economy is slowing, albeit only gradually, and at the same time inflationary pressures continue to mount.
 
Uncharted territory

Ross Bowen, managing director of Connells Survey & Valuation, added: "A cut in the base rate today would have boosted confidence in the property sector but we’re in uncharted territory at the moment. 

“In spite of three interest rate cuts since December, borrowers haven’t benefited from lower mortgage rates, and banks’ significantly reduced lending is making the situation worse.

“The truth is the Bank base rate has become completely detached from the cost of borrowing for the man on the street.  The UK housing market is vulnerable at the moment.  The number of people buying houses has halved in twelve months. 

“And it's now more crucial than ever that the Government, Bank of England and lenders work together to tackle these issues."

Buyers being restrained

David Bexon, Managing Director of SmartNewHomes.com, was disappointed by the decision: “Today’s decision is disappointing given current market sentiment. Not only do we need to see another cut in rates, but we need to see lenders taking up the Bank of England’s liquidity offering to get lending moving.

“A number of buyers are still willing and able to buy but they are being restrained by the shrinking number of mortgage products now being offered by overly cautious lenders. Housebuilders want to sell houses and buyers want to buy; now it’s up to the lenders to play their part to get the housing market moving again.