The Bank Of England has decided to keep the interest rate at 0.5% for the fifteenth month in a row.

The  200 billion pounds of quantitative easing scheme remains unchanged as analysts predicted.

The freeze was expected to remain until the extent and scale of the government’s spending cuts programme is announced in the June 22 budget.

According to Nationwide, average house prices have increased in May by 0.5% (month on month). With the annual rate of house price inflation now 9.8%, compared to May 2009.

Martin Gahbauer, Nationwide’s Chief Economist said:

The price of a typical UK property rose by a seasonally adjusted 0.5% month-on-month (m/m) in May, following a 1.1% increase in April.  The smoother 3 month on 3 month rate of increase rose from 1.1% in April to 1.7%, as February’s fall in house prices dropped out of the most recent three month average.  The annual rate of house price inflation dropped from 10.5% to 9.8%, which reflects the weaker pace of increase in May 2010 relative to May 2009.  Since reaching a trough in February 2009 – following a drop of 19.3% from their October 2007 peak –  house prices have risen by 12.2% and are now just 9.5% below the October 2007 peak.

“Housing market conditions remain characterised by thin transaction volumes and a relative scarcity of properties for sale, despite a slow return of more sellers in recent months.  The current supply-demand balance on the market is still consistent with relatively stable to modestly upward trending prices.”