Response to the Bank of England interest rates decision
Response to the Bank of England interest rates decision, thoughts from the Industry
- Rates were left unchanged at 4.75%
- MPC voted 6 to 3 in favour of holding rates flat, with three members preferring to cut rates by 0.25% to 4.5%
- In the near-term inflation is expected to “continue to rise slightly”
- The market was expecting rates to remain at 4.75% prior to the announcement
Nicholas Hyett, Investment Manager at Wealth Club, commented;
“In the bleak midwinter,
Interest rates were froze,
GDP went backwards,
Inflation rates they rose,
Consumers they were struggling,
Struggling, struggling so,
In the bleak midwinter, not so long ago.
Rock and a hard place,
Bailey in-between,
Recession and stagflation,
Risk on every screen,
Fed already stalling,
With a hawkish turn,
Cut to boost the market, or hike and watch it burn.”
Kevin Shaw, National Sales Managing Director, LRG:
It is disappointing that the Bank of England has decided not to reduce interest rates further today, considering that the UK’s interest rate (at 4.75%) is out of sync with the ECB (at 3%) and other comparative economies globally.
My view is that the Bank was too slow to increase rates back in 2023 and now runs the risk of being too slow to reduce them. The Bank needs to release the handbrake on the economy as soon as possible.
A variety of economic indicators – from business confidence and employment rates to consumer spending – suggest that a December drop would have brought some much welcome seasonal cheer.
I am now hopeful of an interest rate reduction on 6 February.
In the meantime, however, the start of the year is likely to provide some momentum – whether from those keen to initiate a move as part of their New Year’s resolutions, or in a rush to avoid the Stamp Duty hike in April. Furthermore, despite the holding of interest rates today, mortgage lenders are already competing on rates.
I remain optimistic of a rush of activity in January, and a lowering of interest rates in February which will keep the momentum going into the Spring market.
Sarah Thompson, Managing Director, Mortgage Scout:
“With the Bank of England’s decision to keep interest rates at 4.75%, the wait continues for a possible reduction, which many homeowners, first-time buyers, and businesses have been anticipating. The ongoing inflationary pressures mean the Bank remains cautious. The current rate environment, ‘higher for longer’, still puts pressure on households, particularly those with variable rate mortgages or those about to remortgage.
“The hope now shifts to 2025, when rate cuts are expected to become more likely if inflation continues to ease. However, this prolonged period of elevated rates means many are facing higher borrowing costs, making it even more crucial for homeowners to review their mortgage deals ahead of time. For those approaching the end of their fixed terms, it’s essential to plan ahead and lock in the best possible rate before changes come.
“At Mortgage Scout, we strongly recommend that homeowners and potential buyers take action sooner rather than later. Consulting a mortgage advisor can provide clarity on the best options available in this uncertain landscape and ensure that people are prepared for when rates do start to move down. This is a time to stay informed, as the right mortgage decisions now could make a significant difference in the years ahead.”
Nathan Emerson, CEO of Propertymark:
“With many national and international factors continuing to shape the global economy, the Bank of England is understandably taking a cautious path until they can be confident that they are able to safely reduce interest rates back. It has been encouraging to see interest rates reduced across recent months, but the base rate can only be reduced if all factors allow.
“High interest rates can of course affect borrowing for many people, especially those stepping onto the housing ladder, but it’s important there is sensible balance to keep the overall economy secure and workable for all.”
You May Also Enjoy
Volume doubles as property market sees strong return of new applicants
Property valuation leads to agents up 50% on last year
Worst areas for landlord eviction waiting times
726,000 rented homes could remain non-decent by 2035
UK House Price Index for December 2025
