Bank of England hold interest rates at 5.25 per cent.

The Bank of England has again kept the base rate stable at 5.25% during its sixth consecutive Monetary Policy Committee meeting. This decision met widespread expectations, with ongoing discussions about the timing of a potential rate decrease.

Looking forward to the next meeting in June, there will be two additional sets of inflation data available. If these indicate a sustained positive trend, it would be prudent for the Bank to consider a rate cut to avoid repeating past mistakes of reacting too slowly. A reduction in rates could significantly lift borrower confidence and energise the housing market.

The MPC’s recent decision saw a majority of seven to two in favour of maintaining the Bank Rate at 5.25%, with two members advocating for a decrease to 5%. This reflects a wider division compared to the previous vote, where eight members favoured holding the rate and one supported a quarter-point reduction.

In terms of mortgage pricing, the Bank of England’s base rate is only a part of the equation. Swap rates, which help determine the cost of fixed-rate mortgages, are also crucial. If these rates continue to decline, mortgage lenders are likely to offer more competitive rates, enhancing the options available to borrowers at more attractive prices. With major lenders such as Barclays and Lloyds already announcing rate cuts this week, it’s hopeful that other institutions will soon do the same.

At a press conference following the decision, Bank of England Governor Andrew Bailey acknowledged expectations that the MPC might vote to cut rates in June, though he stated that much will depend on how the inflation data develops over the next four weeks. That outcome may well come to pass, but with conditions remaining volatile, it is difficult for borrowers to track which lenders are offering the best deals. Therefore, for individuals planning to secure a mortgage this year, we recommend consulting with a whole-of-market broker such as Fitch & Fitch to discover what options are available.