Interest rates stay put

A loud whoosh filled every street in Britain last Thursday. You can’t have missed it. Although it sounded like the wheezing cough of a winded mammoth, it was actually the collective sigh of relief from home buyers across the country. The Bank of England had just announced its decision to

keep the bank rate at 5.25%. Which, for those of you whose forte is not banking (erm, I guess I am thinking of myself), means that interest rates on mortgages will remain at the current level.

In my neck of the woods, the sigh was soon followed by a flurry of ideas about extending the budget?read: upping the mortgage?for the phantom flat I have been hunting for ages. Plenty of online mortgage repayment checking ensued. I was nearly sold on the idea of asking for an extra £100,000 which would allow me to buy at least a vacuum cleaner cupboard (which is marginally bigger than the broom one my budget currently stretches to).

But then I received the press release from those spoilsports at the Royal Institute of Chartered Surveyors. ‘Respite for financially stretched households could prove short-lived as a return to calmer financial markets will prompt at least one further interest rate hike to 5.5%,’ said Chief Economist Milan Khatri?a man whom I have never met but who instantly earned my dislike as the bearer of bad tidings.

The sigh of relief that had been dancing in my throat since the previous day died a sudden death. And that’s the strangled moan you heard fill the streets of Britain on Friday morning.

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