BREAKING NEWS - Interest rate held again at 5.25%
The Bank of England has decided to keep the base rate at the same level for the second month in a row.
The Bank of England has decided to hold the base interest rate at 5.25% for the second consecutive month.
A decision to keep the rate static was widely expected with inflation, at 6.7%, apparently under control, albeit not dropping.
Last month, the Bank held the rate after 14 consecutive increases, since the end of 2021.
Mortgage rates have started to fall slowly to reflect the Bankās decisions, but are still much higher than a year ago.
The Bankās Monetary Policy Committee voted by a majority of 6ā3 to maintain the rate at 5.25%. Three members preferred to increase it by 0.25 percentage points, to 5.5%.
Nicholas Mendes, mortgage technical manager at John Charcol, says: āTodayās āholdā announcement has been widely anticipated by the markets and commentators, with any further rate hikes looking increasingly unlikely.
āUK economic activity is weakening, and inflation is on a downward trend. Now is the time to pause and monitor rather than adding further pressure onto borrowers and consumers.ā
Mark Harris, CEO at mortgage broker SPF Private Clients, says: āAs expected, the Bank of England has made the wise and welcome move to hold base rate again at 5.25 per cent.
āThe run of 14 consecutive rate rises before Septemberās pause have been painful. Todayās decision will raise hopes that base rate has peaked, allowing the dust to settle rather than causing further anxiety and distress for borrowers,ā he says.
āBorrowers will be wondering what happens next. Those hoping rates will move swiftly downwards could well be disappointed; we expect a period of around six months during which rates will plateau, followed by a gradual reduction in base rate to ānormalisedā levels of around 3 per cent.ā
Nick Leeming, chairman of Jackson-Stops, says: āThe market will take some clarity and comfort from the Bank of Englandās decision to hold the base rate at 5.25% today.
āWhile international events have added to already challenging conditions and the curtain has firmly fallen on the era of cheap borrowing, monetary policy will not be determined in the long-term by short-term pressures, and quite rightly so,ā he says.
āThis is the final time the Monetary Policy Committee will meet before the Chancellorās Autumn Statement, when we hope to hear more about the Governmentās plans for the housing market including possible policy changes and tax cuts.ā
Simon Gammon, managing partner at Knight Frank Finance, says: āMortgage rates have been easing since late July and are now beginning to plateau.
āThe Bank of Englandās decision to hold at 5.25% was largely priced in, and we expect the rate of inflation to be the biggest determinant of whether we see more substantial mortgage rate cuts before the end of the year,ā he says.
āTypical five-year fixed rates now sit around 4.8%. That may ease to around 4.5% by the year end if the annual rate of inflation dips to 4% ā 5%.ā
John Phillips, CEO of Spicerhaart and Just Mortgages, says: āIt is encouraging to see the Bank of England continue to hold interests rates, as the markets and the majority of economists expected.
āIn reality, it feels like the only logical move as itās still too soon for any reduction and an increase would just lump further misery and uncertainty on borrowers ā especially as the Bank of England itself still doesnāt yet know the full extent or impact of its 14 previous rises,ā he says.
āWhile inflation stagnated in September, the general consensus is it will continue its downward trend. In the mortgage market, todayās news will hopefully offer some stability and give lenders the confidence to take a further look at their books and continue to price more competitively.ā
