Rate on hold 'will cost mortgage holders £105m a month'

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According to mortgage experts John Charcol, the decision by the Bank of England to keep interest rates at 5.5 per cent will cost mortgage holders £105 million per month.

Ray Boulger, the company's leading independent mortgage adviser, pointed out that, because the Bank had considered a 0.5 per cent cut in December, and then unanimously agreed on a 0.25 per cent cut, it was strongly believed that another cut could have happened this month.

"We estimate the [Bank's monetary policy committee's] failure to cut the Bank Rate this month will cost UK homeowners with a variable rate mortgage about £105 million per month in mortgage interest payments," he said.

Looking ahead, John Charcol believes that there could be a "modest further increase" in inflation above where it is now, but that deflationary pressures from economic slowdowns in other western markets should mean it will fall back later in the year.

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