Bank of England Maintains Bank Rate at 5.25 percent

HOMEOWNERS were given a boost yesterday when policymakers at the Bank of England voted to keep interest rates at 5.25%.

The no-change decision had been widely expected, although economists said a rate rise was still likely in the coming months, possibly in May.

Interest rates have risen three times since August as the Bank's Monetary Policy Committee strives to keep a lid on inflationary pressures.

The 1.8% increase in house prices reported by the Halifax left businesses convinced that the Bank had offered only a temporary reprieve and that it would drop its "wait-and-see" approach over the coming months.

Further rises in house prices have also been reported, although the Halifax and Nationwide both said house price inflation was set to fall back amid weakening demand after the recent hikes and affordability concerns.