Bank of England to leave interest rates at 0.5% until well into next year

Decision by 8-1 will reassure businesses and households as MPC gives no indication of imminent rise, while Bank cuts inflation forecast

The Bank of England is ready to step up controls on the housing market if a prolonged period of record low interest rates risks inflating a property bubble, governor Mark Carney has said. As he signalled that interest rates were likely to remain on hold well into next year, Carney suggested the Bank may have to revert to other measures, such as tighter lending rules, to keep a lid on house prices.

Speaking after news from lender Halifax that house prices had jumped almost 10% from a year ago, he raised concerns that households were saving less and that some would end up overstretching themselves. More action could be warranted from the Bank, which has the power to clamp down further on mortgage lending as part of its macro-prudential tools.

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