The Bank of England’s Monetary Policy Committee (MPC) has voted unanimously to hold the base rate at 0.1%. 

The Committee also voted unanimously for the Bank of England to maintain the stock of sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, at £20bn and to continue with the programme of £100bn of UK government bond purchases.

A statement from the central bank said it believes the outlook for the UK economy remains uncertain: “It depends on the evolution of the pandemic and measures taken to protect public health, as well as the nature of, and transition to, the new trading arrangements between the European Union and the United Kingdom.

BoE Money and Credit - mortgage approvals

BoE: Mortgage market measures to be reviewed

“It will also depend on the responses of households, businesses and financial markets to these developments.”

Paul Elliott, managing director of Propp, added: “At a time when lenders are already extremely cautious, negative interest rates would have had a huge knock-on effect on consumers, businesses and lenders across the UK.

“We have already seen some lenders that rely on retail savings forced to pause lending as savers have withdrawn their money during the pandemic.

“Any negative interest rate decision could see mortgage lenders restrict or remove tracker mortgages from their product offering which in turn removes some of the flexibility many borrowers enjoy, especially those products available without any early repayment charges.”