The Bank of England has kept base interest rate at 5.25%.
Some industry figures hoped for a cut following yesterday’s inflation news, in which the headline Consumer...
The Bank of England has decided to maintain the base interest rate at 5.25%.
Despite some industry figures hoping for a rate cut following recent inflation news—which showed the headline Consumer Price Index dropping to the target 2.0%—most financial analysts expected no change from the bank’s monetary policy committee, which met today.
Former RICS residential chairman Jeremy Leaf added: "While a base rate cut would boost the housing market, given the uncertainty surrounding the election announcement, no change was expected. Although inflation is falling, it's still early days as wage growth and the services sector continue to exert pressure.
“Hopefully, lenders will anticipate a forthcoming base rate drop and begin lowering mortgage rates, even slightly, which would certainly improve confidence."
Nicholas Mendes of independent mortgage broker John Charcol noted: “Market predictions leading up to this monetary policy committee meeting indicated a 50% chance of an initial rate cut to 5% by August. However, June’s inflation and wage growth data will be crucial for that assumption, with a potential total decrease of 0.5% by the end of the year.
“Today’s decision to hold rates steady may be tough to accept, but recent lender movements suggest we are nearing the end of the era of high-priced fixed rates. Borrowers will need to remain patient a bit longer before seeing high street lenders competing at sub-4% fixed rates.”
Nathan Emerson, chief executive of Propertymark, commented: “For the housing market, further confidence regarding the long-term trajectory of inflation is essential. The Bank of England has been clear about this stance before committing to reduce the base rate. Propertymark is eager to see rates reduced when conditions permit, leading to competitive mortgage deals from lenders at the earliest opportunity. We've seen significant progress in the housing market since the start of the year, and maintaining stability is crucial.”
If you are looking to increase the profitability of your asset please get in contact with our team with the link below.