Interest rate remains at 0.5%

The Bank of England has held base rates at 0.5%, leaving the rate unchanged at the lowest ever level for the third consecutive month. It has continued with its programme of so-called quantitative easing or asset purchase – buying bonds with manufactured digital currency – to the tune of £125bn.

The Committee expects that the announced programme will take another two months to complete. The scale of the programme will be kept under review.

James Thomas, head of residential and investment at Jones Lang LaSalle, said the hold signal coincided with signs of increased liquidity in the housing market.

“There are tentative signs that the pace of decline in house prices is beginning to moderate. The three-month Libor rate, on which most mortgages are based, has fallen from 1.45% at the beginning of May to 1.28% now.

“The fall suggests that liquidity is starting to come back to the money markets which will hopefully feed through to mortgages.”

However, he said it was still too early to be sure that the housing market had “bottomed out.”