The Bank of England’s Monetary Policy Committee (MPC) will want to see what impact its Funding For Lending scheme has before taking any further measures to stimulate the economy, according to Ray Boulger of John Charcol.

This follows yesterday decision to keep the Bank Rate and the size of the Quantitative Easing programme unchanged.

“With London being such an important part of the economy and warnings for non Olympic visitors to stay away from the Capital appearing to have been overdone, resulting in significantly lower than normal other activity, this could easily negate the hoped for boost to Q3 GDP from the Olympics,” said Boulger.

“The news from the ECB… is likely to generate much more interest than the MPC. The ECB appears to be in serious danger of over promising and under producing.

“Swap rates and three-month Libor have both fallen by around a quarter of a percent since the Mansion House Banquet speeches from the governor and the chancellor and three-month Libor, currently 0.74%, is still falling.

“This combination, plus the Funding For Lending Scheme, has produced record low five-year fixed rates, with three lenders offering a sub 3% rate for LTVs up to 60%. Apart from Nationwide’s 3.39% rate up to 70% LTV other lenders, especially at the higher LTVs, need to play catch up.

“Current rates available on five-year fixed rates up to 70% LTV offer excellent value but for those needing higher LTVs there is merit in waiting until the market settles down, when I expect better value will be available.

“With the best five-year fixed rates now available at, or below, rates for shorter term fixes and even most trackers, the value sector of the market is currently undoubtedly five-year fixes, even factoring in the possibility of Bank Rate getting even closer to zero later this year.”