Bank of England holds base rate

The Bank of England's monetary policy committee has announced that it has decided to hold the base rate at five per cent.

At noon today the MPC revealed its decision, quashing fears that it would increase the rate in response to the recent surge in consumer prices index inflation to 3.3 per cent.

However, those hoping for more positive action to help the housing market have given a downbeat response to the news.

Seamus Kavanagh, the managing director of property firm Badger Holdings, said: "I am extremely disappointed, not to say concerned, that rates have remained unchanged and this could have a potentially catastrophic impact on, not only the UK property market, but the wider UK economy."

The Royal Institution of Chartered Surveyors labelled the decision as "understandable" but said the MPC could have room to cut rates later in the year as inflationary pressures ease.

Aspiring homeowners unable to get a cheaper mortgage because of the base rate or find the home they want because of a reduction in new building may seek to resolve the situation through the self build method.