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"The Bank of England leaving rates on hold is holding borrowers to ransom"

ended 20. June 2024

The Bank of England has just left rates on hold at 5.25%, the full minutes available >> here <<. Newspage asked brokers if this was the right decision, how lenders could react and what it means for borrowers and the broader property market. Their views are below.

23 responses from the Newspage community

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Ben PerksVerified
Managing Director at Orchard Financial Advisers
The Bank of England leaving rates on hold is holding borrowers to ransom. There is no excuse for this cowardice. Mr Bailey’s committee have been inflicting pain on borrowers in the hope that we would hit the 2% inflation target. Now we are there, they’ve moved the goal posts. They don’t seem to appreciate the desperation that borrowers are facing and they’ve done nothing to ease the suffering. This is further proof that those in power are totally out of touch with the people they are meant to be helping.
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Samuel Mather-HolgateVerified
Independent Financial Adviser at Mather and Murray Financial
Seeing a rate cut this year is as likely as Jeremy Corbyn becoming Kier Starmer’s Chancellor. The central bank seems frozen with fear of inflation coming back and getting embedded. Only two members of the nine wanted to cut rates and this hasn’t changed despite inflation falling to 2% yesterday. This is a gut punch for borrowers who have to put up with 16-year high rates for a longer period, and with thousands coming off fixed rates in the second half of the year, they would have been hoping for a rate cut to ease the burden of much higher mortgage payments. The only green shoots are that three of the nine members of the committee said they closely considered a rate cut but opted for the status quo.
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Andrew MontlakeVerified
Managing Director at Coreco
The Bank of England has once again erred on the side of caution, with wage and services inflation staying stuck at levels the Bank is still uncomfortable with. Equally, cutting rates just before a General Election may be considered too political and lead to questions over their independent status. Whilst there is also a concern that current inflationary falls may be temporary, and could bounce in the last quarter of the year, the country desperately needs the boost of a cut to relieve some of the financial pressures that have held back the economy and put borrowers under immense pressure. The Bank of England is fast running out of excuses. For mortgage borrowers this decision will cause an audible sigh of despair as they feel that they have taken more than their fair share of a battering in the battle against inflation. We need brave action from the Bank and a cut in August must now surely be on cards or some serious questions will be levelled at the Governor.
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Kundan BhaduriVerified
Property Developer and Portfolio Landlord at The Kushman Group
Another hold? How is that? The Bank of England doesn't seem to understand the pain and misery it is causing borrowers and the housing market in general. A simple 0.25% reduction in the base rate would have sent a deep and sensible message down the spine of this nation that the Bank of England is still independent and makes it own judgement, irrespective of politics and impending elections. We can only hope the next MPC meeting will bring celebratory cheers to the crowds, with a newly formed Labour goverment at the centre.
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Ian Hepworth0
Director at Funding Solutions UK Limited
This is another kick in the teeth for business owners who have patiently been waiting for inflation to fall back to 2%. Finally it has happened and the goal posts have been moved. Businesses have endured rising costs in the form of inflation but also in borrowing costs. The base rate increased from 0.10% to 5.25%. For a business with a £100,000 overdraft that means an additional cost of up to £5,150. For larger businesses it is an additional £51,500 for every £1m borrowed. This not only eats away at profits but stifles growth as businesses can't afford to borrow to invest in new equipment.
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Riz MalikVerified
Independent Financial Adviser at R3 Wealth
It seems like the MPC is waiting for divine intervention before it acts given that only two members voted for a cut. However, it should be no surprise given their track record. The next administration needs to do a proper review of the Central Bank and not just one where their friends mark their homework.
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Craig FishVerified
Director at Lodestone Mortgages
A seismograph spike has been recorded up and down the UK as borrowers and business owners stamp their feet in disappointment at this decision. After the positive inflation data yesterday there was hope that this decision wouldn’t be made. The pain continues and the next decision rests on more positive data and, of course, a new government. We may have to wait until September.
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Simon BridglandVerified
Director at Charwin Private Clients
Borrowers will be flabbergasted that the Bank of England has left rates on hold when inflation is at target. Indications are rumoured to be that base rate will stay as it is until possibly November before any rate cut comes. This is a hammer blow to both retail and corporate borrowers, who are still very much feeling the financial strain of the post-pandemic years.
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Rohit KohliVerified
Director at The Mortgage Stop
Borrowers will be boiling over this summer after the Bank of England left rates on hold yet again despite inflation hitting the magic 2% target. What is worrying is that voting hasn’t changed with a 7-2 vote against a reduction. This doesn’t bode well for an August cut, which will leave borrowers no better off than they were 12 months ago despite all the positive noise on inflation.
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Jack TuttonVerified
Director at SJ Mortgages
All signs are there that a cut in August is coming, the discussions that were held in the latest meeting show strong indications that the tide is turning. Thats not to say that the latest hold on the base rate will be disappointing news to mortgage holders who are desperate for some positivity in the market.
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David StirlingVerified
Independent Financial Advisor at Mint Wealth
This is terrible news for beleaguered consumers across the country but of no surprise with the General Election looming and a new vanguard looking likely to come in. It doesn't seem to matter what happens with inflation or wholesale prices, none of these savings get passed on and we are stuck in a rut of higher prices for the foreseeable future. This is dampening the property market through the usual busy summer period and making 2024 a virtual wash-out.
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Justin MoyVerified
Managing Director at EHF Mortgages
Inevitable dithering by the Bank of England will only infuriate mortgage borrowers, as markets price in any potential cuts for the Autumn now, and not the summer. Borrowers may see marginal improvements in rates whilst application volumes suffer in the heat, but any thoughts of proper rate cuts have just evaporated.
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Ranald MitchellVerified
Director at bad credit mortgage specialists Charwin Mortgages
It's deeply disappointing to see onoy two members on the Bank of England's nine-member committee voting in favor of cutting rates. For the past two years, we have been consistently reminded of the 2% inflation target. Now that we have achieved this target, it seems the goalposts are being shifted. The country is in dire need of economic stimulus, and this decision marks yet another missed opportunity. The committee members must urgently address the necessary steps to reduce rates and manage public expectations effectively. This dithering approach only prolongs the uncertainty and hinders our economic recovery.
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Adam StilesVerified
Managing Director at Helix Financial Partners
Not a massive surprise to many, but was it the right call? It certainly puts more pressure on a reduction at the next meeting post election, assuming inflation is in line with expectations. It will be interesting to see how the SWAP markets react and how that plays out with lender pricing.
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Dariusz KarpowiczVerified
Director at Albion Financial Advice
As predicted, the base rate was held at 5.25%. The positive news of CPI inflation hitting the target of 2% wasn't enough to prompt a rate cut. Historically, the Bank of England tends to follow the FED's decisions, and they've only deviated once in 40 years. This means we'll continue to see rates remain high, despite many wishing for lower rates.

While some feel this decision holds borrowers to ransom, it's important to remember that current rates, though higher than recent years, are not extraordinarily high when viewed historically. Rates in the 1-2% range were an anomaly, and we may not see them return anytime soon. Lenders might keep their rates steady or make minor adjustments, but borrowers should be prepared for the current rate environment to persist. This decision underscores the importance of realistic financial planning and underscores the need for stability in the broader property market.
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Elliott CulleyVerified
Director at Switch Mortgage Finance
Holding interest rates today was expected with most looking towards the 1st of August for the first drop in interest rates. The Bank of England acted too slowly when inflation was rising and now with inflation at 2% they will be accused of being asleep at the wheel once again.
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Elliott BensonVerified
Owner at Sett Mortgages
As many of us predicted, the Base Rate has stayed the same, dissapointing but I feel we are going to see a reduction come December

It feels for me, like many others, the end of a long, tiring road but I think we are now seeing some light at the end

We may see some slight reductions from lenders for some fixed rates, otherwise not much is going to change until the next meeting
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Rhys SchofieldVerified
Brand Director at Peak Mortgages and Protection
A yellow bellied and lily livered decision from the out of touch BOE today. Rates went up to combat inflation which is now below their target of 2%. Job done. Maintaining high rates at this point smacks of being an act of cruelty for normal people in the middle of a very real cost of living crisis.
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Amit PatelVerified
Adviser at Trinity Finance
UK interest rates have been held at 5.25% since August last year. Yesterday’s inflation figures showed inflation has fallen to the Bank of England’s 2% target for the first time in nearly 3 years. This is a huge blow to borrowers. The MPC should have voted for a rate reduction. The question we should be asking is the Bank of England truly independent of the Government.
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Jonathan Burridge0
Founding Adviser at We Are Money
Whilst a rate reduction would be welcomed by all, we have to be realistic. This is the first month in years inflation has hit its target. It looks likely we will have a new Government in July and there are geo-political events that could scupper any wishful thinking. One swallow does not make spring.
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Scott Taylor-Barr0
Principal Adviser at Barnsdale Financial Management
With headline inflation back to target many were hoping that would give the Bank room to cut the central bank's interest rate, but they voted to hold at its present level, by a reasonable majority. Steering the economy of a country is akin to steering the proverbial super-tanker: any adjustment made now not having any noticeable effect on things for many months in the future, so it will be the projections the Bank's economists and analysts have produced that will be key to their decision today, with their decision to hold suggesting that the current forecasts show inflation holding at around 2% over the longer term and so no action is required by the MPC to move it one way or the other, at the moment. A change in government, and so government policy, is around the corner though so we may yet see some substantial changes in the fundamentals being used to create those forecasts, meaning the next meeting could result in a vastly different view being taken.
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Ben TaddVerified
Director at Lucra Mortgages
No surprise the Bank of England Base rate has been held at 5.25% for the seventh time in a row. Not the good news that so many mortgage borrowers have been desperately praying for, but a faint hope still remains that the Monetary Policy Committe may finally act to intervene and bring about a reduction on the 1st August at the next meeting. With inflation having now reached the magic 2.00% target, the next Base Rate decision will largely depend on the inflation data provided in the next period to determine the direction of travel.
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Marcus WrightVerified
Managing Director at Bolton Business Finance
This decision by The Bank of Engalnd to hold rates is an appalling one, which is very damging to the economy. They were too late raising interest rates when inflation was running away and now they too slow at cutting it. If they are not cutting rates because of the election, then the very fact they are concidering it as an influece is playing politics. Many families and businesses across the country will be dismayed by this shockingly bad decision.