(1888PressRelease)
November 24, 2007 - London (ask4loan) : The Monetary Policy Committee of the Bank of England decided to keep the base rate of interest unchanged at 5.75 per cent. The rate setting body voted 7-2 in favour of the current rate. The Bank of England deputy governor John Gieve and David Blanchflower wanted interest rates to become lower.
Amidst the continuing turmoil in financial markets and the resultant tightening of loan conditions, the interest rates have increased in the recent months. The mortgage and personal loans providers have raised their interest rates by up to 4 per cent.
The cost of credit has increased for lenders also. The credit squeeze has led some building societies to increase their savings rate in order to get more money from the market. However, the majority of the rate setters saw little indications of the credit squeeze hitting British consumers and businesses.
The minutes of the meeting says: "Moreover, since a reduction in Bank Rate was not widely expected this month, there was a danger that an immediate cut would be misinterpreted, precipitating an unwarranted further fall in the market yield curve."
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