While it is welcome news for borrowers this month, many in the City still expect there may be another rate rise in the near future.

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

There have been three 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 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 MPC's members were keen to wait and see the effect that 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," said Investec economist Philip Shaw.

Inflation figures are to be released later than usual this month, on 20th March, so the rate-setters are unlikely to have been given a preview of them.

The committee is also likely to have wanted to know what is in Gordon Brown's budget on 21 March before raising rates again.

The Bank of England recently indicated that interest rates would need to rise further, to keep inflation near 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," said The UK economist at BNP Paribas, Alan Clarke.

Such speculation is likely to further fuel the already growing consumer appetite for fixed-rate deals on mortgages & remortgages, Michael Cooke of 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 often serves their needs much better by keeping that great fixed rate mortgage deal in place, yet still utilising available equity to secure a to provide the funds required."

The minutes from this month's Monetary Policy Committee meeting are to be published on the morning of Budget day.

There will be plenty of interest in whether the voting has changed from February's 7-2 result in favour of keeping rates unchanged.

some also felt that the recent falls on global stock markets indicated that a rate rise was less likely.

David Kern, economic adviser to the British Chambers of Commerce 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."

The manufacturers' organisation EEF, 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.