The Bank of England’s Monetary Policy Committee (MPC) has voted to hold the Bank Rate at 5.25% for the sixth time in a row.
The MPC voted by a majority of 7–2 to maintain Bank Rate at 5.25%. Two members voted to reduce the rate by 0.25 percentage points, to 5%.
Rob Clifford, chief executive of mortgage and protection network, Stonebridge, said: “With swaps increasing in recent weeks, the recent decision by the US Federal Reserve to hold its rate amidst concern about its inflation not coming down, and the next set of ONS inflation figures not due to be published for another couple of weeks, it was highly unlikely the Bank would announce any kind of rate cut, and so has been the case. We have also seen the mood shift with regards to the timetable for a cut to Bank Base Rate, with suggestions that we may now be waiting until the autumn before the Bank feels empowered to act.
“Where once it appeared somewhat nailed-on that the Bank would act in June, that sentiment has shifted, and therefore mortgage pricing is not likely to benefit from any reduction in the base rate possibly until September and November. With several large mainstream lenders moving their mortgage pricing upwards to replicate the move in swaps, this is likely to be the position, at least in the short term and certainly up until the next MPC meeting in June. While we wait for next month’s meeting, advisers should continue to inform borrowers that the best time to act is now, as it never pays to base personal mortgage decisions on what might or might not happen in the future; they can of course only advise on what is available in the present.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, added: “The Bank had some tough choices to make – on the one hand it can see inflationary pressures easing with the headline figure now at its lowest for two years but on the other, wage growth remains stubbornly high.
“As far as the housing market is concerned, we are finding borrowers increasingly concerned at the uptick in mortgage rates and the delay in what most people expect is a cut in base rate sooner or later.
“The comments and voting pattern around the decision are sometimes more interesting than the decision itself and clearly the direction of travel for rates is downwards when it is judged the right time to do so. The chances of even a small reduction resulting in runaway property prices or substantial rise in activity are slim, bearing in mind recent fairly flat activity.”