The Bank of England reviewed the base rate on 14 December and chose to keep it the same for the third consecutive time.
The Bank of England’s Monetary Policy Committee (MPC) has today voted to keep the base rate at 5.25%. The rate increased 14 times between December 2021 and August 2023, but this is the third time it has remained the same.
The market mostly expected the rate to stay the same, but a minority of MPC members voted to raise rates again but were outvoted.
Does this mean the base rate will come down soon? This is unlikely. In November’s meeting, The Bank of England said rates would have to remain “high enough for long enough” to ensure that inflation remains controlled.
Combating inflation
The previous increases were made to combat inflation, which peaked at 11.1% last October. Inflation has fallen steadily since, and Consumer Price Inflation stood at 4.6% in October, compared to 6.7% in September, according to the Office for National Statistics. New inflation figures will be released on 20 December, so we’ll keep you updated.
Earlier this week, the ONS said wage growth was slowing at the fastest pace for two years, which is expected to bring down inflation further.
There has been some good news in the mortgage market lately. Mortgage interest rates have fallen recently. There is a general belief in the market that central interest rates will fall faster than expected next year.
More competitive mortgage deals
One industry spokesperson said that two and five-year fixed-rate mortgage deals are now much more competitively priced. Swap rates, which reflect lenders borrowing costs, have fallen since May. Lenders are passing on falling borrowing costs to customers.
If you’re due to remortgage in the next six months, we advise you to act now. We offer a market watch service. If we secure you a new deal now and the rates come down before your term ends, we will re-submit your application. That way, you’re guaranteed to get the best possible rate and not leave it too late to take action.