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Bank of England rate decision Dec 24

ended 19. December 2024

The Bank of England has just left rates on hold at 4.75%. Six members (Andrew Bailey, Sarah Breeden, Megan Greene, Clare Lombardelli, Catherine L Mann and Huw Pill) voted in favour of leaving rates on hold. Three members (Swati Dhingra, Dave Ramsden and Alan Taylor) voted against the proposition, preferring to reduce Bank Rate by 0.25 percentage points, to 4.5%. Given the state of the economy and stress many households and businesses are under, was this the right or wrong decision?

7 responses from the Newspage community

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Ben PerksVerified
Managing Director at Orchard Financial Advisers
This was the least anticipated rate announcement so far, as a hold was set in stone. It’s a shame they didn’t have the courage to cut and help borrowers, but it’s no surprise. Interestingly, 3 people voted to cut which could provide a glimmer of hope for 2025 if they can get more on board.
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Justin MoyVerified
Managing Director at EHF Mortgages
This is the typical 'wait and see' approach that we have seen so many times in the last few years from the Monetary Policy Committee. Unfortunately the inflationary indicators are too strong to get full commitment to further rate cuts in 2024, but the 6-3 voting suggests there could be better support in 2025 if we continue to have a slowdown in the economy after Christmas. The cut in rates by the Fed will show if it is possible to cut interest rates with inflation still a little toppy. Let's hope it's not too little too late in the UK.
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Darryl DhofferVerified
Founder at The Mortgage Geezer
No surprises here. It's like wrapping Threadneedles Christmas decision in cling film, we could all see what was coming. Labour's budget has been like rolling out an abestos lined Scrooge, which for the time being will be here for some time to come, and as we head into 2025, very little to cheer about.
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David StirlingVerified
Independent Financial Adviser at Mint Wealth
Threadneedle Street sticking to 4.75% was widely anticipated all week, given increased wage growth and inflationary pressures. This could really exacerbate the insolvency figures that were released also, showing that those seeking some form of debt management was up significantly from last year. Job prospects for 2025 are also looking a bit lacklustre following the October Budget. Borrowers will just need to buckle up now through the festive period and hope for some relief in the New Year as cuts are not now expected until spring.
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Elliott CulleyVerified
Director at Switch Mortgage Finance
The decision to hold interest rates is not a surprise given the recent Budget. Inflation rising again was expected but with the economy struggling the Bank of England will need to make some changes soon and expect February to be targeted by the Bank of England to reduce rates, especially if the economy continues to flatline.
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Rakesh DuaVerified
CEO at DUA Accountancy & Business Consultancy
This was expected but that doesn't make it less disappointing. Once again we have a more cautious approach from the rate setters rather than one that looks at stimulating the economy. We have yet to see the knock-on effect of the draconian Budget and the Bank may have missed an opportunity to get ahead of the curve. Next year we may see a change of policy at the Bank of England and an acceptance from the Government that they have might slammed the breaks on too hard. It's shaping up to be a cold few months for the economy ahead.
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Iain SwattonVerified
Director at Exemplar Financial Services
The Bank of England’s decision to hold interest rates at 4.75% is no surprise, but it feels like a missed opportunity. A bold rate cut could have injected some much-needed confidence into the economy, but with only three members voting to lower rates, change was always unlikely. For borrowers, it means more of the same—no immediate relief from high rates and no Christmas cheer in sight. Let’s hope the Bank shows more courage in the New Year.