Base Rate Held
Bank of England’s (BoE) Monetary Policy Committee (MPC) voted 8-1 to maintain the current Base Rate at 5.00%.
The BoE decision to hold its base rate at 5%, even after the US Federal Reserve (Fed) cut its base rate by 0.5%, could be due to several key factors reflecting differences in economic conditions, inflationary pressures, and policy priorities between the UK and the US.
- Inflationary Concerns in the UK
- Domestic Economic Conditions
- Currency Exchange Rate
- Forward Guidance and Market Stability
While the US Fed’s decision to cut rates likely reflects slowing economic conditions and lower inflation risks, the BoE is still grappling with more persistent inflation, necessitating a more cautious stance by maintaining rates at 5%.
Swap Rates Rise As Financial Markets React
Swap rates increased as a response to the Bank of England holding its base rate at 5% due to heightened expectations of a prolonged tight monetary policy, inflation persistence, higher borrowing costs, and market uncertainty. These factors contribute to rising costs in the swap market as participants adjust to a possible higher interest rate environment.
19th September Swaps
13th September Swaps
Schedule A Mortgage Review
If you want to benefit from the latest rate reductions, call 0800 0350095 or click on the button below to schedule a review.