Today, the Bank of England (BoE) Monetary Policy Committee voted by a narrow majority of 5-4 to hold the Base Rate at 5.25% despite yesterday’s 6.7% inflation announcement that fuelled speculation that a 15th consecutive increase was highly likely.
The decision to hold the rate will likely result from a slowing economy and its broader impact on the jobs market. Still, it also aligns the UK with decisions made by the US Federal Reserve rather than the European Central Bank, which increased its rate by 0.25% last week.
If the MPC’s inflationary target of 2% is met, there may be more rate increases just around the corner. Still, it’s good to see them stop trying to crack a walnut with a sledgehammer!
Mortgage Rate Lottery?
Lenders have continued to reduce mortgage rates amidst Swap Rate reductions. Yesterday’s 3% fall following the inflation figure announcement has been followed today by a marginal increase across the board.
With high competition, lenders will likely continue to offer competitive rates in a market of hesitant borrowers looking for stability. However, the indication and forecast are that mortgage rates may not increase but are likely to stay higher for longer, and current rates are the new norm to accept and budget accordingly.
We are booking new products six months before the end of the current mortgage and then reviewing them monthly until completion. If you want your mortgage reviewed and want to benefit from the latest rate reductions, call 0800 0350095 or click on the button below to schedule a callback.