The Monetary Policy Committee today voted to maintain the official bank rate paid on commercial bank reserves at a half of a per cent, and also voted to continue with its programme of asset purchases totalling £200 billion financed by the issuance of central bank reserves.
The last change in interest rates was in March.
Yesterday the chancellor of the exchequer Alistair Darling said in his pre-Budget report that the economy would shrink by 4.75 per cent in 2009 compared with his Budget estimate in April of 3.5 per cent.
The Bank last month added £25 billion to its quantitative easing programme, and it is expected to wait until this scheme runs out before talking any further action.
Ben Thompson, Legal & General's director of mortgages said following the decision: 'The remortgage market is actually showing early signs of warming up, but it won't really get going until the bank base rate is increased.
'When this happens, borrowers that are able to move around are going to start doing so quickly, creating havoc with lenders' back books. We think that 'locking the back door' is something that lenders should be thinking about far in advance and ought to be preparing their retention strategies already. We would encourage lenders to work with brokers to ensure a cost-effective solution for all parties.
'We would also encourage brokers to start reviewing their books, identifying people on standard variable rates without tie-ins and making lists of prospects to call when the time is right.'
The last change in interest rates was in March.
Yesterday the chancellor of the exchequer Alistair Darling said in his pre-Budget report that the economy would shrink by 4.75 per cent in 2009 compared with his Budget estimate in April of 3.5 per cent.
The Bank last month added £25 billion to its quantitative easing programme, and it is expected to wait until this scheme runs out before talking any further action.
Ben Thompson, Legal & General's director of mortgages said following the decision: 'The remortgage market is actually showing early signs of warming up, but it won't really get going until the bank base rate is increased.
'When this happens, borrowers that are able to move around are going to start doing so quickly, creating havoc with lenders' back books. We think that 'locking the back door' is something that lenders should be thinking about far in advance and ought to be preparing their retention strategies already. We would encourage lenders to work with brokers to ensure a cost-effective solution for all parties.
'We would also encourage brokers to start reviewing their books, identifying people on standard variable rates without tie-ins and making lists of prospects to call when the time is right.'
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