While it is welcome news for borrowers this month, many in the City still expect there to be another rate rise in the next few months.

UK inflation dropped to 2.7% in April, down from an 3% - an 11-year high, but it is still higher than the target of 2%.

borrowers have witnessed three base rate rises of a quarter percentage point each since last summer: in August, November and January. A number of homeowners with luck or foresight on their side were canny enough to already have fixed rate deals in place on their mortgages, and following these rises the demand for fixed rate deals increased further.

Michael Cooke, senior partner at homeowner loans specialist The Loan Helper commented "It is a good thing that a number of homeowners have been prompted to put fixed rate mortgages in place to protect them from the higher cost of increases in the base rate in the future."

An increase this month had been seen as unlikely by many, after the minutes from last month's meeting suggested that the Monetary Policy Committee's members were keen to wait and see what effect the increases so far had had.

"The gist of the minutes to February's meeting was that the MPC really had time to sit and wait, to assess evidence to see whether upward risks to inflation were crystallising," observed Philip Shaw, economist at Investec.

The latest inflation figures are to be released later than usual this month, on 20 March, so the Monetary Policy Committee are unlikely to have been given a preview of them.

The Monetary Policy Committee is also likely to have been keen to know what is in the Chancellor's budget on March 21st before increasing rates again.

The Bank of England recently indicated that rates would need to rise one more time, to keep inflation close to its long-term target of 2%.

"I think there is some uncertainty about when the next rate rise will be, but April or May will become the favoured choices," observed BNP Paribas UK economist, Alan Clarke.

Such speculation should further fuel the ongoing consumer appetite for fixed rate deals on mortgages & remortgages, Michael Cooke further commented "of course, homeowners often need to raise further funds from time to time, and for those who have already secured a fixed rate, a remortgage often does not make financial sense compared to a secured loan which can often serve their needs much better by keeping that great fixed rate mortgage deal in place, yet still utilising available equity to secure a low rate loan to provide the funds required."

The minutes from March's Monetary Policy Committee meeting are to be published on Budget day morning.

There is likely to be much interest in whether the voting has changed from February's 7-2 result in favour of keeping rates unchanged.

Some people also thought that the recent falls on global stock markets suggested that a rate increase was less likely.

Economic adviser to the British Chambers of Commerce, David Kern noted: "Given the worsening global risks, highlighted by the acute turmoil on the international financial markets, an early hike in rates could have very harmful effects on business confidence and on the economy's growth prospects."

EEF, the manufacturers' organisation, also welcomed the decision not to raise rates.

"EEF believes that two of the Bank's stated fears, an escalation of earnings growth and firms pushing through significant price increases, have yet to materialise in any substantive fashion," it commented.