All you home owners out there Relax! The interest rate has now been kept on hold at 5.75% for another month. The decision from The Bank Of England has been expected for some time now by the City, which believes the Bank still has to evaluate the recent turmoil and the Northern Rock crisis.
Very few analysts believe the turmoil is over and the credit crunch has passed. Despite signs that British banks have found out the extent of their losses in the wake of the US sub-prime market troubles, the uncertainty still remains.
Recent signs have shown that higher borrowing costs have hit the housing market. Mortgage approvals for August fell to 109,000 - this is the lowest level since April. Hometrack have revealed that the five rises in the base rate of interest since August of last year are putting potential homebuyers off.
However, inflation is well under control at 1.8%. If anything, homeowners and prospective buyers would welcome a cut in the base rate.
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