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Bank of England freezes base rate at 0.5%

Bank of England freezes base rate at 0.5%

Category: Savings

Updated: 18/10/2010
First Published: 05/08/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The base rate of interest has been frozen at its historic low of 0.5%, the level it has remained at since March last year.

When the base rate will increase has been a hot topic of the last few months.

There have been predictions that it may stay at 0.5% until 2014, although it is widely thought that it will increase at some point in 2011.

There were no surprises today, however, as the Bank of England's Monetary Policy Committee (MPC) voted to keep interest rates where they are.

Commentators will now be waiting until the minutes of the meeting are released later in the month to see if there was another split in the camp.

In both June and July's MPC meetings, Andrew Sentance has voted to increase the base rate of interest to 0.75%.

All other seven members have consistently voted to keep the measure on hold.

The decision means that lean times continue for savers, who are battling against the combination of record low interest rates and high inflation.

Do not despair though, as there are still savings accounts out there that are worth considering.

If you're looking for peace of mind in these uncertain times, then a savings account that allows instant access to your money may be sensible.

The Web Saver Extra from Halifax offers a rate of 2.6% on balances of just £1 upwards and you can get your hands on your money as and when you want it.

If, on the other hand, you'd like to lock your money away for the year in the hope that rates are higher when your account matures, Northern Rock will give you 3.00% on your savings.

At the other end of the scale, ICICI Bank UK will pay you interest of 4.75% if you invest in its five year bond.

With any luck, interest rates might be a bit higher when that savings account matures in 2015!

Find more great savings rates - Compare savings accounts

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.