Interest Rate Update to 10 November 2010

UK Interest Rate: 0.5%

UK Interest Rates Forecast: No change in 2010 or perhaps even 2011

Bank of England Holds Rates for November

The Bank of England has left the base rate unchanged at 0.5% in November for the 20th consecutive month. The Bank's Monetary Policy Committee also voted to leave the Quantitative Easing program unchanged – that's printing money to you and me.

Some analysts are now saying that they expect the Bank to keep the base rate on hold until the end of 2011 – a recent article in The Guardian said that "interest rates are likely to stay on hold until at least the end of next year".

Mortgage Rates Reach New Lows in October, Says BoE

Tracker mortgage rates reached new lows in October, according to the latest figures from the Bank of England. The average cost of a tracker fell to just 3.5% as lenders tried to encourage borrowers to remortgage onto new mortgage deals.

The typical cost of fixed rate mortgage deals fell, too. The average cost of a five-year fixed rate deal fell to 4.85% - the lowest level for five years – while the typical cost of a two-year fixed rate deal with a 25% deposit fell to 3.72%, a rate that compares well to many lenders' variable rates.

Halifax Expects Rates to Remain Low

One of the UK's biggest mortgage lenders, Halifax, is expecting interest rates to remain low, too.

In its latest House Price Index, Halifax housing economist Martin Ellis said "Interest rates are likely to remain very low for an extended period, which will continue to support the improved mortgage affordability position for homeowners."