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Bank of England: "Today's decision is not just a hold, it’s a stranglehold"

ended 21. March 2024

The Bank of England has just left rates on hold. It says: “At its meeting ending on 20 March 2024, the MPC voted by a majority of 8–1 to maintain Bank Rate at 5.25%. One member preferred to reduce Bank Rate by 0.25 percentage points, to 5%.” Newspage asked brokers and financial services experts for their views, below.

19 responses from the Newspage community

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Ben Perks
Managing Director at Orchard Financial Advisers
Today's decision is not just a hold, it’s a stranglehold. Borrowers are under immense pressure. The Bank of England seems totally out of touch with what the public are going through. Today was an opportunity to take the pressure off borrowers, and it’s so disappointing that they haven’t had the bottle to do it and the cost of borrowing will remain at the highest level for 16 years. Those in power keep talking about the 2% inflation target like it’s some sort of magical figure that will fix all the country's problems overnight, but the reality is it’s not. There will still be a long way to go. So, who cares if we hit 2% in May or August when people are struggling today? Provide the respite people need, when they need it.
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Rohit Kohli
Director at The Mortgage Stop
This decision is as disappointing as it was predictable. With the lowest inflation since September 2021, mortgage arrears increasing, personal debt reaching record levels and the economy on a cliff edge you could have been forgiven for hoping that the MPC would show some bottle and leadership to drive a confidence boost that everyone needs. Instead, we get more of the same caution and dithering which will forever remain when the bank is only focused on one thing, namely driving inflation down to 2% come what may.
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Jack Tutton
Director at SJ Mortgages
I think the Bank of England may have missed a trick by not reducing the base rate today. Only one committee member has voted to reduce the base rate. With the greater fall in inflation than expected for the year to February, they could have given more confidence in the UK economy by making a 0.25% reduction. It is interesting to read that there were no votes this time around to increase the base rate. Hopefully this is a sign that a cut is coming soon.
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Michael Haupt
Owner / Adviser at Tomorrow Mortgages
Today's decision by the Bank of England was expected but will leave many borrowers and homeowners, who would have been hoping for a rate cut, hugely disappointed. However, with yesterday's positive news regarding inflation and for the first time in this rate cycle, no MPC member voting for a rate increase, hopefully the Bank of England will soon take the opportunity to reduce the Base Rate and restore some much needed hope and confidence.
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Lee Gathercole
Co-Founder at Rebus Financial Services
No surprises here at all. The MPC have once again erred on the side of caution. There are so many people out there struggling to repay their mortgage that the MPC isn't living in the real world. There surely should be pressure now to make rate cuts. I would be quite frustrated if the next meeting is to hold once again after positive inflation news.
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Riz Malik
Independent Financial Adviser at R3 Wealth
Inflation has fallen over 50% and the economy is on its knees. This is the wrong decision from a Monetary Policy Committee who are out of touch with reality. Dr Bernanke’s report on their forecasting is expected sometime in spring but that may be too late for the UK economy.
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Darryl Dhoffer
Founder at The Mortgage Geezer
The Bank of England has once again left borrowers in the lurch. The Bank of England's inaction today is a slap in the face to struggling families. While the decision itself wasn't a shock, it does little to address the very real pain inflicted by high mortgage rates. Household budgets are stretched thin, and the wait-and-see approach feels more like a shrug than a solution. The Bank of England needs to wake up and smell the coffee. People are hurting and waiting for some relief from high mortgage rates. It's time to take action and consider a rate cut to ease the burden on everyday people.
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Dariusz Karpowicz
Director at Albion Financial Advice
The Bank of England's decision to keep rates on hold at 5.25% didn't exactly shock the financial world. This move was largely anticipated by analysts and experts alike. With an 8–1 vote, it's clear there's consensus for stability, save for one maverick member favoUring a cut. This sets the stage for a hopeful glance towards the summer: should inflation continue its retreat, we might just see the Bank of England usher in a much-awaited rate reduction. Here's to lower rates on the horizon, guided by cautious optimism and economic indicators.
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Craig Fish
Director at Lodestone Mortgages
Whilst a cut would have been nice, it wasn't expected. It's good to see that some sense has returned with no members of the committee voting for an increase. The hope now is that the MPC stop acting like a herd of Federal Reserve-following sheep, stand on their own two feet and make their next decision for the benefit of the UK. For the avoidance of doubt that needs to be a cut.
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Justin Moy
Managing Director at EHF Mortgages
Keeping the base rate on hold was always the likely outcome, but the shift of support within ther MPC is more significant, and sends the right tone of message to the markets. Increases are definititely off the table, talk of 2 or even 3 rate cuts in 2024 have surfaced, and its time that the Swap markets reacted positively to this signal. Inflation has one way to go over the coming months, so the base rate should follow right behind.
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Andrew Montlake
Managing Director at Coreco
“Whilst the outcome of the latest MPC meeting was predictable, there is some comfort in that at least there was no member of the Committee voting for a rise this month.
“Whilst this shift is a clear indication of future direction of travel, it is nonetheless another opportunity missed for an early rate cut which is something the country is crying out for.
“After the positive inflation news yesterday, and despite the fact we are not out of the woods just yet, the Bank is yet again putting itself into a position of having to be reactive later rather than being proactive earlier, with people all over the country being held to ransom under the weight of higher interest rates.
“We should hopefully see some downward movement in SWAP rates now, which will help give mortgage lenders the room to return to a more competitive mortgage rate environment”.
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Elliott Culley
Director at Switch Mortgage Finance
The decision to hold rates comes as no surprise. Only one member thought it a good idea to reduce rates, which is a little worrying. With no meeting until May, we now won't see a reduction until at least then. Let's hope this is not too late to react, after being too late to raise rates initially.
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Gary Bush
Financial Adviser at MortgageShop.com
The Bank of England takes the coward's way out by just leaving the base rate at 5.25% again. The population needed a break but they didn't get it from a committee of ostriches. With the inflation data this week coming in lower than expected, people in the know would have seen the record insolvencies, mortgage arrears, and reliance on credit cards to make monthly bills and acknowledged that a .25%, as a minimum, would have helped households. Sadly, like the government, the BOE couldn't care less about the people at the bottom of the food chain it seems.
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Hannah Bashford
Director at Model Financial Solutions
The base rate has been held again which is disappointing, but to be expected. What is great news is that this is the first time there have been no votes to raise the base rate, which is a good indication that we are edging closer to where we need to be to cut interest rates and give UK households the help they need.
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Akhil Mair
Director at Our Mortgage Broker
The Bank of England keeps the base rate steady at 5.25% for another month. But here's the deal: waiting for others to act first isn't the game plan. Time for the bank of England to make a move and shape the future.
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Graham Cox
Director at Bridging Hub
No surprise that the base rate was left unchanged. But money markets will take encouragement that there are no longer any MPC hawks still voting for an increase, and indeed one member voted for a cut. It's surely only a matter of time now before we see one, perhaps as early as May. In the meantime, mortgage rates will hopefully start falling again on the back of yesterday's better than expected inflation figures.
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Alastair Hoyne
CEO, Finanze Capital at Finanze Capital
This was to be expected. It's a little too early to react to the drop in inflation just yet.
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Luke Thompson
Director at PAB Wealth Management
This is precisely what was expected and the markets appear to have already priced it in. In the coming weeks, if the data regarding inflation remains consistent and if the next figures end up where we expect them to be I suspect the markets will start pricing in for a first base rate cut in June. I felt that with the way the data has been going more than one member of the MPC may vote for a cut in the rate but I still think that ratesetters had their fingers burned when they were far too slow to react to rising inflation in 2021. However, as we have seen it will only take one or two poor pieces of economic data or an escalation of the conflict in the Red Sea for the markets to be spooked again and for borrowing rates to rise. We are not out of the woods yet when it comes to interest rate cuts this year.
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Rob Gill
Managing Director at Altura Mortgage Finance
Today's base rate hold by the Bank of England was no surprise. The UK is in a position, and has been for a while, where the Bank of England's credibility is more important for mortgage rates than cutting base rate. Keeping base higher for longer, and showing they are serious about fighting inflation, is the key to stable or falling mortgage rates.