Reaction to Bank decision to hold interest rates

Bank of England | riebevonsehl - stock.adobe.com

Read the reaction from experts to the Bank’s decision here -

Ben Thompson, deputy CEO, Mortgage Advice Bureau, said: “The Bank of England was always going to play it safe this time around, with the decision to hold the base rate at 4.25 per cent widely expected.

“There are still plenty of positives to be taken from this, especially for those who think their financial situation may set them back from getting a mortgage. From 100 per cent lending options now available, to mortgages that stretch your borrowing power, there are so many ways to get on the ladder - regardless of the size of your income or deposit.

“It’s also good to look at how far we’ve come, with the current base rate being the lowest we’ve experienced since May 2023. We can still anticipate cuts later in the year, although how soon these will arrive remains to be seen. As always, speaking to a broker should be your first port of call. Their expertise is invaluable in helping you get mortgage ready and navigate current market conditions with ease.”

Alpa Bhakta, CEO of Butterfield Mortgages Limited, said: “Investors will certainly have hoped for a rate cut today, but persistent inflation and other economic indicators have made the Bank of England’s job increasingly complex. As such, a rate hold had become increasingly likely in recent weeks. It has been a common theme of the past two years, with the base rate falling at a slower-than-expected pace.“Even if UK inflation runs above the 2 per cent target, there remains a real possibility that we’ll see the base fall later this year – the question is how many cuts, and when will they come. For now, the lending sector must respond to today’s decision by doubling down on support for both brokers and investors.”

Paresh Raja, CEO of Market Financial Solutions, said: “When it cut the base rate in early May, the MPC strongly indicated that further cuts would follow. But economic and political landscape, both in the UK and globally, continues to evolve at pace – pronounced turbulence and uncertainty made a hold today almost inevitable.

"But we should see the bigger picture: the base rate is 0.75 per cent lower than it was ten months ago, and a gradual decrease is still expected in the coming year. The challenge right now is to ensure inertia doesn't set in within the property market while would-be buyers wait for further cuts; we have to unlock buyer demand right now.“Lenders cannot afford to dwell on decisions from Threadneedle Street, and should focus on what they can control. With the prospect of multiple rate cuts in the second half of this year now fading, it’s vital that lenders continue to adapt their products and offerings in line with borrowers’ needs. If they can do that, investors should have the confidence to execute their plans, helping to unlock activity across the market despite the higher-rate environment.”

Paul Noble, CEO of Chetwood Bank, said: “A hold today is the cautious choice, but leadership means more than playing it safe. The MPC’s decision will be welcomed by some, but it’s another example of cautious drift over clear direction. Holding their ground may make sense given chaotic global pressures, but it’s not the decisive leadership our economy needs.“The economy has been through the ringer, with the Chancellor’s plan providing domestic pressures to add to those caused by the US, Russia, and beyond. However, the central bank continues to act as though inflation is the only variable that matters.“The MPC’s lack of action piles on greater uncertainty for mortgages as well, leaving would-be buyers in the lurch. This cautious approach could lead to greater paralysis when what markets need is a catalyst. For savers, the risk is time – it’s vital to find best returns, to stay flexible, and to stop letting handwringing on Threadneedle Street dictate their outcome.”