The Bank of England (BoE) has held the base rate at 5%, which is the fourth consecutive month that the Monetary Policy Committee (MPC) has left it unchanged.

The MPC continued to face a tough decision regarding the base rate as the need to curb inflation, which at 3.8% has increased above expectation, had to be measured against a cut in the interest rate which would hopefully stimulate activity in the property market.

The US Federal Reserve also recently left its interest rate unchanged at 2% and it faced the same challenge as the MPC in balancing the risk of rising inflation against attempts to manage the credit crisis.

Peter Bolton King, chief executive of the National Association of Estate Agents (NAEA), told PIN: “We are disappointed as we would have liked to have seen a reduction in rates in a bold attempt to re-start the housing market. A cut in rates would have helped to stimulate consumer confidence at a time when individuals’ self-assurance has taken a heavy hit. We know that a positive housing market is essential for the overall economy. Reducing the rate would have sent a clear signal to the market, encouraging lenders to reduce their rates and allowing the current mortgage shackles to be loosened giving the market the positive impetus it needs.”