The Bank of England was criticised by economists and the housing industry yesterday after leaving the base rate on hold. But really what did they expect? Back to back rate cuts were never on the cards.

The Bank's Monetary Policy Committee voted to leave borrowing costs unchanged at 5per cent, despite many experts' fears that this tactic could endanger the wider economy.
Howard Archer of Global Insight said: "The recent stream of weaker data and survey evidence relating to consumer confidence, retail sales, the housing market, the services sector and manufacturing activity suggest that the UK economic downturn is deepening."
I can’t speak for the latter two sectors, but I can certainly vouch for the fact that the housing market is on its knees. Estate agents are disappearing by the hundreds each week. According to the MD of a prominent chain in the Midlands the situation is worse than the early 90s, because then at least then you had lenders who wanted to lend. Today, he said, you’re hard pressed to get a mortgage irrespective of whether you are a first time buyer or someone who wants to remortgage, because the arrangement fees are ridiculously high.

With LIBOR at 5.78 per cent and still well above base, the banks yesterday made a desperate dash for cash offered by the Bank of England. This is a sure sign that things are still far from normal and why we will get a rate cut of 0.25% next month.

Will this make things any easier for homeowners and first time buyers? I would love to think so, but I don’t see much improvement for at lease another six months.