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Firms slam Bank's rate decision

Loans lenders and other financial institutions have criticised the Bank of England's interest rate decision.

Yesterday, the Bank's Monetary Policy Committee (MPC) voted to keep the base rate at 5.25 per cent.

Previously, lenders had called for the rate to be cut, in order to encourage more people to borrow money.

The apparently slowing housing market - with a study from Halifax released today showing a further drop in property prices - has caused concern among many firms.

Andrew Montlake at mortgage broker Cobalt Capital said that the decision was a "shame" for homeowners.

"A cut would have been a welcome boost for homeowners, especially first-time buyers, and would have helped offset the rises in tracker rates, which have been occurring regularly over the past few weeks as lenders fight to increase their margins," he added.

Brokerage firm John Charcol also said that the Bank was "fiddl[ing] while the economy burns".

Simon Ward at New Star Asset Management also said: "A rate cut was needed to offset the negative economic impact of the significant deterioration in credit markets over the last month."

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