Bank of England rate decision 1 Feb 2024

The decision to maintain the current rate was anticipated. Nonetheless, it's noteworthy that within the Monetary Policy Committee, two members are advocating for a rate hike, while one prefers a reduction to 5%. The Bank's projection that the target of 2% will be achieved by the second quarter is a positive indicator that may support the possibility of early mortgage rate reductions.

In December, Andrew Bailey said it is really too early to start speculating about cutting interest rates. So as expected, the MPC have opted to hold Bank Rate at 5.25%. Whilst it would have been wonderful to see a reduction, by holding they have provided some stability and certainty when we need it most. The markets should react well to the holding of the rate, and this should help stabilise SWAP rates, which in turn will improve the mortgage rates available to borrowers. So, whilst we aren’t punching the air with joy, this is a welcome announcement. Despite the slight uptick in inflation to 4%, the outlook is positive. Inflation has dropped from an 11% high in October 2022, and should reduce further, so the pressure will be mounting for a reduction in rate at the next meeting. Holding the rate today provides stability, but a reduction would provide the much-needed catalyst that sparks the UK economy back into life.

Anybody that thought anything other than this outcome was going to happen clearly isn't on this planet. A slight blip in inflation over the christmas party period is exactly that, a blip. The Bank of England didn't think it necessary to increase rates and I strongly believe we will start to see reductions in March, which will be music to the ears of borrowers.

A fully expected but disappointing decision. It's interesting to note that two members continued to vote for an increase on the basis of worries over core and services inflation, when the prediction is that inflation will hit target by April. It's good to see at least one member of the MPC is on the side of consumers and businesses. I fully expect the first rate cut to be seen in May.

As expected, we have a decision to hold rates from the Bank of England. The updated prediction that we may hit the 2% target by April is positive and we have one memeber feeling like it is the time to cut rates now. What is worrying is the fact that two members felt another rate rise was needed. Given the struggles that millions are facing, the recent economic stats that show the conomy needs a boost and that even Tory MP's cant pay their mortgages, surely these members need to realise a further rise will likely cause more harm than good.

Today's meeting was not unexpected, with 6 in favour of a hold, 2 in favour of an increase and one lone soldier voting for a reduction. The next few months' inflation figures will determine if any reductions in the Base Rate will be forthcoming.

Early optimism of a cut in the base rate this spring has been diluted today with the base rate being held at 5.25%, with market analysts expecting it to remain at this level until at least the summer. There does however appear to be an ongoing divide within the committee as to the best way forward, two members still voting to increase the base rate which would have been a surprise to many.

This is a hugely disappointing decision from the Bank of England, namely choosing to hold rates rather than provide a much needed reduction. Given they are forecasting the 2% inflation target to be acheived by April, easing rates now would unlikely derail this, whilst at the same time, provide a much needed stimulus to the economy and consumer confidence. What's also worrying is the disagreement within the committee as to what to do and when, with voting pulling in 3 different directions.

A widely expected hold but a great indicator that the tides are turning with one commmittee member voting for a cut. All eyes are now on inflation in a couple of weeks as this will be a greater indicator of what comes next. A cut would have been a great boost to put some money back into people's pockets however as the underlying cause of inflation is goods- and service-related, this equally could have had an adverse effect.

Taming the UK economy has it ever been harder than it is now, the pressure to reduce rates was pushed to one side and the decision to Hold rates at 5.25% has been the overiding choice made at todays meeting. Whilst there was some who viewed an increase as the right way to go, the majority felt that holding was a better option, and that enough had been done already to dampen the UK markets. Was this a missed opportunity to make a bold statement of intent, that we are on the road to recovery. Holding the rate may be seen by some as a Win giving some stability to the market and with the Inflation figures set to continue their downward trend will the news have a positive impact on swap rates, will lenders continue to factor in reductions helping the Uk mortgage Mortgage market in its resurgence from the ashes of 2022/2023. A lot remains to be seen and there are possibly more questions than answers right now but the way things are looking BOE rate reductions may be closer than we thought.

Keeping the base rate at 5.25% was definitely the right output, what is more interesting is to see how he MPC voted, as that can give more indication about future rate changes, which as mortgage owners our clients are concerned about. The mixture of opinions from the MPC members still doesn't make the outlook that clear, but the first looking to cut rates is a step forward for the positive, and the next few months will give more clues to the rest of 2024. We may see mortgage rates wobble a bit further over the next week or two as a result of today's lack of change.

This is a common sense decision which will be welcomed by everyone. Quite how far out of touch 2 of the committee are to vote to increase the rate is baffling. They clearly have some personal agenda or interests they are putting above the benefits of the economy.