A palpable sigh of relief was audible from borrowers as the Bank of England opted to hold the base rate at its historic low of 0.5% for the 23rd consecutive month.
Stephen Robertson, head of the British Retail Consortium heralded the move, saying: ‘At a time when consumer confidence is weak and the housing market is slow, raising rates could only have done harm.’
After inflation pushed up living costs, there has been pressure on policymakers to take action, but economists at last concluded that the UK economy is too fragile to withstand hikes.
However, growth forecasts for the year remained sluggish, with Gary McCausland of property developers Richland Group predicting a fall in GDP over the next year.
‘We...have a general mood fuelled by fear, fear of losing your job, fear of rising prices, fear of falling house prices etc.,’ he said.
‘The bottom line is people feel poorer and they are concerned about the future, and until this sentiment changes... we will have an economy that will struggle.’