Fool.co.uk comments on the Bank of England's interest-rate decision

The Bank of England left interest rates unchanged at 5.75% today.

The move was not completely unexpected given that the Bank's hand to control inflation through higher interest rates has been undermined by recent events in the market.

David Kuo, Head of Personal Finance at Fool.co.uk, says: "Homeowners can draw some comfort from the Bank's decision to leave interest rates unchanged.

In fact, there have even been suggestions that the Bank may cut interest rates to avert a slowdown in the economy.

"However, a recent report (1) from the Bank of England suggests that a rate cut in the near future is unlikely given that five interest-rate hikes in the last year have failed to dampen demand from consumers to borrow more.

"But whatever the Bank does in terms of future interest rates, borrowers can take active steps now by overpaying their loans today.

"While the Bank of England involves itself in complex economic analysis, consumers should instead stick to simple arithmetic.

This states that every pound you overpay on your loan will go to decrease the amount borrowed rather than go towards interest payments.".

Back to top