What's more, experts predict that interest rates aren't going to budge any time soon as the economy continues on its albeit, unofficial path of rest and recovery.
Some positive signs suggest that we could be past the worst in terms of the recession - both Nationwide Building Society and Halifax reported an increase in house prices last month; and retail sales have also risen recently. However, the Monetary Policy Committee's decision to extend the policy of quantitative easing and pump a further £50billion into the system indicates that it still sees the need to provide further assistance to help bring about a sustained recovery.
So what does this all mean for savers and borrowers?
Silver lining for savers
Activity in the savings market continues in spite of the static base rate. In the last week alone there have been a number of new savings accounts launched or rates increased from providers including Egg, Nationwide, Norwich & Peterborough and Leeds Building Society.
Egg's Savings Account is now paying 3.25%. You can get slightly higher with Coventry Building Society's 1st Class Postal Account - it's paying 3.30% but is less flexible than the Egg account. The minimum investment is £1,000 as is the minimum withdrawal and you can only make four penalty-free withdrawals in a year.
The Egg account on the other hand allows unlimited penalty free withdrawals and the minimum balance is just £1. The rate does include a 2.0% bonus which lasts for 12 months however so you'll probably need to move your money again at that time (the Coventry account, as with all the highest paying easy access deals, also includes a 12-month bonus).
Other leading easy access accounts include Alliance & Leicester's Online Saver Issue 5 and Birmingham Midshires' Telephone Extra, which are both paying 3.15%. Citibank's Flexible Saver Issue 5 is paying 3.10% and Leeds' new Online Access Account has a rate of 3.05%.
If you have money you can afford to lock away, the Post Office Growth Bond is paying a fixed rate of 3.85% for a year. And for savers with £25,000 to invest, Cahoot's 18-month Fixed Rate Bond has a rate of 4.00%.
The 'true cost' of a mortgage
Around three million homeowners on tracker mortgages may have been laughing all the way to the bank since interest rates started to plummet last year - but plenty more mortgage holders are not seeing any direct benefit from the low interest rates.
For example, Nationwide has slashed the cost of its tracker and fixed deals by as much as 0.5% this week but, as ever, the benefits are reserved for those with a 40% deposit or equity already stored in their home. The lion's share of borrowers have actually been forced to watch mortgage rates climb in spite of the low base rate and falling Libor - the all-important rate at which banks lend to each other.
The cheapest two-year fixed rate deal on the market is currently from First Direct, priced at 3.34% and with a £1,498 arrangement fee. However, the deal is reserved for homeowners who only need to borrow 60% of the property value.
Less fortunate borrowers who need a loan of 90% of the cost of a home will have an entirely different experience. In this case, the best two-year fixed rate is from Yorkshire Bank with an interest rate of 5.99% and a £999 fee. To put it into context, that's a staggering £303 more each month than the cheapest like-for-like deal available.
And it's not just the monthly expense: 90% deals are increasingly difficult to qualify for in the first place. Borrowers will need to demonstrate an impeccable credit rating and very secure employment - both also difficult feats with the current fragile economy.
Housing market hopes
The continuing reluctance of lenders to part with the cash in their coffers is also pouring cold water on any sparks of recovery in the housing market. Halifax this week reported a 1.1% increase in the value of the average home in July - the third time house prices have climbed since the beginning of the year.
But in order for recovery to continue, homebuyers and movers need simple access to cash - something that, according to separate figures, is still not happening. For example, the British Bankers' Association reported at the end of last month that mortgage lending had reached a 15-month high in June with 35,235 loans being approved. Although this is 61% up on the same month last year, even the new improved figure is still a staggering 57% down on the 12-year average.
Meanwhile the Royal Institution of Chartered Surveyors has revealed that one in 10 property sales are falling through due to a lack of mortgage finance. In other words, even where consumers are willing to take the next step on the property ladder, many are simply not being handed the chance.
Negative equity
Other homeowners will also find themselves in a state of negative equity - where the value of your home is less than the mortgage you have secured against it. This is because, even though there are tentative signs that house prices are beginning to climb again, the average value is still 12.1% lower than this time last year, according to Halifax.
More highly-borrowed homeowners, such as those who took 100% plus loans (available from lenders like Northern Rock at the peak of the housing market) will find themselves prime candidates for negative equity. Little surprise then that this week the now state-owned bank announced losses of £724.2m in the first six months of the year, as its customers struggled to keep up with their mortgage repayments.
No need for panic
But even if you are one of these homeowners, there is no cause for panic. If you are able to meet your monthly mortgage costs and don't want to move, the value of your home is largely irrelevant. However it will mean you have to grit your teeth and stick with your current deal even if you spot better options available elsewhere.
If you need to move home with negative equity, things can get a little trickier as you will need to bridge the financial shortfall. But even in the worst case scenario, if you have no savings but can demonstrate to your lender that you desperately need to move - to start a new job for example - you may be able to negotiate transferring the shortfall to an unsecured loan.
Caveat emptor!
In short, a historically low base rate is no reason for either borrowers or savers to sit back on their laurels. In fact, still midway through unchartered economic territory, there has never been a better time to take your finances back in your control and shop around for the best deal available.
For more on this month's interest rate decision watch 'MPC decision August 2009'.
Disclaimer: Please note that any rates or deals mentioned in this article were available at the time of writing.
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