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Bank of England holds interest rates at 4%
Quick Summary
The Bank of England has held interest rates at 4%, in a widely expected move The decision is taken by the nine members of the Bank's Monetary Policy Committee - four voted for a cut, but five voted to hold.
Mortgage rates have been coming down over the last few weeks and rates are much more competitively priced than they were. Nationwide has just launched a sub 3.65% two-year fixed rate, which is the cheapest residential fixed rate since 2022. This is great news for borrowers, especially as there are so many homeowners coming up to remortgage over the next year.
The Bank of England has held interest rates at 4%, in a widely expected move. The decision is taken by the nine members of the Bank's Monetary Policy Committee - four voted for a cut, but five voted to hold.
Sarah Breeden, Swati Dhingra, Dave Ramsden and Alan Taylor are the four members who voted to reduce bank rate by 0.25% to 3.75%. The bank rate was held at 4% in September after being cut from 4.25% to 4% in the August meeting.
This means borrowers could get an early Christmas present if the Bank decides to cut rates on 18 December. In general, the bank cuts the rate when it wants to increase spending by consumers and businesses, and raises it when it wants to control inflation. Although with an upcoming Budget and struggling economy there are significant pressures to lower the base rate again.
Inflation was 3.8% in September - well above the Bank's 2% target - but the Bank is confident that it has peaked. The economic news coming out of the UK is not particularly good at the moment, especially with the negative tones coming from the Chancellor during her last press conference. As a result, this means that the Bank of England may well be forced to cut the base rate a few times.
Aaron Strutt, product director at Trinity Financial, says: "I suspect the Bank of England Monetary Policy Committee will lower the base rate next month as we've seen them do in the past - just before Christmas.
"Mortgage rates have been coming down over the last few weeks and rates are much more competitively priced than they were. Nationwide has just launched a sub 3.65% two-year fixed rate, which is the cheapest residential fixed rate since 2022. This is great news for borrowers, especially as there are so many homeowners coming up to remortgage over the next year."
The BBC reports Andrew Bailey (pictured above), Governor of the Bank of England, says the Bank's forecasts suggest inflation "will fall to close to 3% early next year, and then decline towards the 2% target after that".
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