The BoE Maintains Base Interest Rate at 5.25% Amidst Inflation Uncertainty

Thursday 1 February, 2024

The Bank of England has once again opted to keep the base interest rate steady at 5.25%, marking the fourth consecutive decision to maintain the rates unchanged.

The base interest rates are set to persist at their highest level in 15 years. Recent figures reveal a faster-than-expected decline in the inflation rate over the past months, prompting a cautious approach from the Bank.

Inflation Trends and Policy Dilemma

Despite the potential for lower energy costs to further decrease inflation in the upcoming months, the Bank of England remains hesitant to cut rates. Surprisingly, two panel members voted for a rate hike in the latest decision.

The governor of the Bank of England, Andrew Bailey said: “We need to see more evidence that inflation is set to fall all the way to the to the 2% target, and stay there, before we can lower interest rates.”

Future Outlook and Mortgage Considerations

The Bank of England is currently predicting that inflation will drop back to its target rate of 2% between April and June this year, before potentially rising again from the impact of energy prices.

With interest remaining at 5.25%, we still believe it is important for clients to review their mortgage arrangements. This is especially true should your existing mortgage deal have six months or less until it comes to end. If this is your situation, then now is the time to start looking at your mortgage options.

Expert Opinion: Uncertainty in the Mortgage Market

Errol Hall, financial consultant and mortgage broker in Cricklewood, North London, said:

“We have seen again that the interest rate has been held at 5.25%. Despite the hold and the BoE’s prediction that the inflation rate will continue to fall, we are still uncertain how the mortgage market will react to the news.”

“As a result of this, we will continue to encourage home owners to assess their mortgage position. In particular, all those currently on a fixed-rate mortgage deal which is ending in the next six months. If this is you, then it is important to act now. Speaking to a professional mortgage broker will help you to find the most fitting mortgage for your situation in such changing times.”

For those looking to assess and review their mortgage options, Thomas Oliver Advisers are available for consultation. Call 01707 872000 to connect with a financial professional and make informed decisions regarding your mortgage.

Your home may be repossessed if you do not keep up repayments on your mortgage.


Get expert advice from your local Financial Adviser today

Complete our quick enquiry form or call our advisers on
01707 872 000

Tick this box if you want your details to be stored on our database, which may then be used for marketing purposes.

Please tick how you would like us to contact you: