Homeowners have been warned that they might not see the benefits of a lower Bank of England base rate.

Yesterday, the bank's monetary policy committee (MPC) decided to leave rates on hold following December's quarter-point cut.

There is talk of further reductions in the coming months as the bank looks to keep the economy moving, which should be good news for anyone with a mortgage.

But David Kuo of the personal finance website, Fool.co.uk, said changes in the base rate would not necessarily be passed on by banks and building societies, despite pressure from the chancellor, Alistair Darling.

"It is quite sweet of Mr Darling to be concerned about mortgage payers," Mr Kuo remarked. "But it is also quite wrong of him to fill homeowners with empty hopes that rate cuts by the Bank of England will trickle into their pockets.

"High street lenders are currently more concerned with rebuilding their battered businesses than repairing consumers' finances. Therefore, many homeowners are unlikely to reap the benefits," he added.

The base rate currently stands at 5.5 per cent, which is historically quite low, but there are persistent rumours of further cuts as the economy shows signs of slowing.


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