Bank of England leaves rates unchanged, at 5.25%

Today's unchanged Base Rate from the Bank of England brings relief to mortgage holders, but it is undoubtedly a knife-edged decision, confirmed by the 5-4 majority vote within the Committee. While it eases immediate concerns for those with variable and tracker mortgages, the persistently high inflation, which still remains three times the Bank's target, suggests that this respite may still be short-lived.

With all the economic data indicating that we have broken the back of inflation and the amount of damage rate rises are inflicting upon people and the economy, this was most definitely the right decision. Hopefully now this will give consumers some confidence and bring the mortgage and property market back to life again.

The Bank of England's decision to hold the base rate steady will be music to the ears of UK mortgage holders. The country needs it and this will allow the lender fixed rate price war to continue. Excellent news. I bet Sunak and Hunt are furious at this decision. For once, the Monetary Policy Committee has listened to the UK public.

Well, the Bank of England finally woke up and smelled the coffee! Holding the base rate steadies the ship and could be just the jolt the property market needs. Here at Moor Mortgages we're keeping our fingers crossed that this marks the beginning of a mortgage market comeback as we wrap up 2023.

"Hello, is it a base rate hold you're looking for"?, yes I certainly am and so are millions of mortgage holders and small to medium-sized business owners. This is simply fantastic news on the back of yesterday's inflation data. The MPC have for the first time in nearly 2 years taken the correct course of action.

A huge sigh of relief will be felt by millions of homeowners around the country following this announcement and will only result in more mortgage lenders looking to reduce their pricing of fixed-rate mortgages in the weeks to come. Although the economy isn't out of the woods just yet, it is a big milestone and hopefully we can say goodbye to any further increases in the months to come.

You do have to question the decision-makers at the Bank of England. They have gone very hard over the past 18 months to raise rates to try to get inflation down. At the first sign of even a small ray of light in this area, they have now stopped the rate rises. I'm not sure this sends the right signals and is this going to be another decision that backfires and means rates have to go higher moving forwards. The other side of this is that if inflation figures continue to be positive over the next few months it could mean that we have finally seen the end of the increases in interest rates which will be a relief to borrowers and businesses. We have seen rate deductions from lenders in recent weeks and I think this move will trigger a potential new round of rate cuts as lenders continue to jostle for market position.

I'm very pleased to see the Bank of England pause its rate-rising cycle
I still find it surprising that in 2023 the best policy tool we can come up with for inflation is simply raising interest rates until the pain slows the economy and spending, causing a lot of unnecessary stress on already hard-pushed households at a time of a cost of living crisis. This is also great news for the mortgage and property industry. While internally we knew that we were nearing the peak of this current cycle as so many lenders have been cutting their fixed rate products, the seemingly endless rate rises from the Bank of England were causing borrowers to procrastinate on committing to their new remortgage deals and putting off some would-be homebuyers completely. This could even bolster house prices as we have seen huge pent-up demand in recent months from people holding buying off until mortgage costs stabilise.

We can finally breathe a sigh of relief after 14 straight base rate rises. This is truly fantastic news. The early thoughts were that inflation was going to stay stable and even rise this month so the unexpected core inflation drop yesterday means that we have time now to see if what they have been doing for the past 18 months is working. The close vote of 5-4 doesn't mean we are out of the woods yet but with swap rates and mortgage rates dropping it feels like there is light at the end of the tunnel.

The Bank of England has finally blinked and held the base rate. This is very welcome news indeed for borrowers, and with mortgage rates falling in recent weeks, we may even be past the peak. The only slight concern is sterling, which has fallen against the US dollar in recent days, and if it continues to do so, that could cause inflationary pressures as oil, gas and many other imports are priced in the greenback.

Holding interest rates steady during a period of high interest rates can have both advantages and disadvantages. On the positive side, it can contribute to price stability by curbing inflation through reduced borrowing, spending and investment. This approach also benefits savers, as higher interest rates provide them with more substantial returns on their savings and investments. Additionally, maintaining high rates can help deter excessive risk-taking and prevent asset bubbles, ultimately promoting financial stability. However, there are downsides to this strategy. High interest rates have the potential to slow down economic activity by reducing borrowing, spending and job creation, potentially leading to an economic slowdown. Borrowers, especially those with variable rate loans, face increased costs, which can strain their financial situations. Furthermore, businesses may delay or even cancel projects due to the higher financing costs associated with high interest rates.

With the Bank of England voting to leave UK interest rates on hold at 5.25%, this brings to an end the longest successive period of rising rates in decades. Mortgage borrowers have been hammered in recent months, on top of the cost of living crisis, so now as we look to have passed the very top of the interest rate cycle, I am hopeful that we start seeing mortgage lenders competing for market share with rates starting with a 4.

This is quite simply fantastic news for borrowers and the broader property market and economy. It is the first time since the end of 2021 that the Bank of England has voted not to increase rates, following 14 consecutive Bank Rate increases. Let us hope this is a sign of a recovery or at the very least much-needed stability. It could definitely help to stimulate the mortgage and property markets and more rate cuts are now likely from lenders.

It's somewhat a surprise move but perhaps reflects the sentiments of the wider public. This is good news for borrowers who have lived with the impact of numerous consecutive rate hikes and comes on the back of many lenders softening their rates and creating much-needed competition. We're not out of the woods yet but it will be interesting where things go from here.

Finally, the Bank of England sees sense and holds off on another rise, which will bring great relief to homeowners and business owners. I am actually shocked that 4/9 of the Monetary Policy Committee still voted to increase the base rate further. Inflation is down again, GDP is falling and unemployment is going up, so if anything they should be considering rate cuts. No doubt they will wait until we are in a big recession until they start cutting rates again, but this is a start.

Mortgage borrowers should be prepared for the possibility of further interest rate increases in the coming months. However, the recent improvements in inflation are a positive sign, and they suggest that the central bank may be able to bring inflation under control without having to raise interest rates too much further.

In a word, phew. With inflation falling faster than expected, pausing for breath was the right thing to do. Hopefully we now just get a bit of stability with mortgages. The early signs are that we've seen lenders reducing their new fixed rates in preparation for such a move and consumers can just get on with life without any more unexpected financial curveballs.