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Base rate reaching 15 year high

Journalist: Jake Carter, Mortgage Introducer

ended 13. February 2023

With the base rate now reaching a 15 year high, what impact will this have on the market?

Do you expect the Bank of England to raise the rate further in 2023?

How high do you see the base rate going before it stabilises? 

5 responses from the Newspage community

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Editor
Riz Malik
Independent Financial Adviser at R3 Wealth
The recent increase in the base rate will not stop residential transactions, especially with fixed-rate pricing decreasing. We may be in for another increase or two but then the tide will turn toward the later part of the year as we see significant drops in inflation. Although the inflation target is a key metric for the Bank of England so is the financial stability of UK Plc.
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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
The central bank will increase rates another 0.5% and then keep them there for a long time, too long. This will depress the market significantly and I expect forced sales to increase.

The bank doesn’t need to do this, there is another way. They appear steadfast in their view that they have no alternative though, which simply isn’t the case. I expect the market to crumble until the summer.
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Gaurav Shukla
Managing Director at Home Me Mortgages
Although inflation is falling at a slow pace, I think there will be another base rate rise to 4.5% to give inflation a big drop off the cliff. Towards the end of the year, we may see the base rate come down to 3.5-4%, before reducing further in 2024. The housing market will stay steady as fixed-rate mortgages are being reduced and are appealing to a lot more buyers. I expect the housing market to pick up speed over the next quarter or two.
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Elliott Benson
Owner at Sett Mortgages
I believe one more quarter per cent increase may be on the way and then it will peak. Fixed rates will continue to fall and then settle over the next two years and in the meantime I think we will see buyers and movers who were put off plans in the tail end of 2022 coming back to the market
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Graham Cox
Director at Bridging Hub
The Bank of England are signalling that the base rate will only increase further if inflation doesn't continue to fall. This is possible if the public sector strikes lead to a wage price spiral.

But my best guess is we're at the top, and the base rate may fall to around 3 per cent later this year if inflation falls as rapidly as hoped. House prices may then fall less sharply.