Bank of England holds interest rates which does not boost ‘economic confidence’

The Bank of England has just announced its decision to hold the base rate at 4.0%, marking a second consecutive hold since the base rate was reduced to 4% in August.

This decision comes despite inflation (CPI) remaining steady at 3.8% for the past three months, albeit at almost double the Bank’s 2.0% target.

The Monetary Policy Committee voted 5-4 in favour of maintaining the rate at 4.0%, with four members actually backing a cut to 3.75%.

Today’s decision reflects a cautious approach from policymakers, with the Bank opting to maintain stability for now while assessing whether inflationary pressures have fully eased.

Islay Robinson, CEO of Enness Global, said, “The Bank of England’s decision to hold rates keeps the economy in a holding pattern at a time when renewed momentum is sorely needed. Inflation has now stabilised, yet the cost of capital remains a headwind for businesses and investors alike.

“A modest rate cut would have been a welcome catalyst for growth, improving investment appetite and boosting economic confidence.

“The longer the Bank of England delays, the longer the recovery is likely to be and, with the case for stimulus growing stronger by the day, the markets will now be looking to the next decision for a clear signal of intent.”

Guy Gittins, CEO of Foxtons, added, “The nation’s homebuyers will not be surprised to see the base rate held today, however, the wider market picture remains encouraging.

“The housing market has demonstrated remarkable resilience throughout 2025, with consistent year-on-year growth supported by stable demand and improving lending conditions.

“With the end of the year fast approaching, we expect this steady performance to continue as motivated buyers and sellers push to complete before the festive period, despite the uncertainty of the upcoming budget.”

Richard Merrett, Managing Director of Alexander Hall, said, “While the Bank of England’s decision to hold the base rate may feel cautious, the underlying mortgage market remains highly competitive, with lenders already adjusting products and criteria to support borrowers.

“The recent expansion of the Mortgage Guarantee Scheme, together with broader lending improvements, has already begun to enhance affordability and confidence, particularly among first-time buyers and movers navigating the current environment.

“Even without a rate cut today, we expect lenders to maintain this positive momentum, keeping the market well-supported as we move towards 2026.”

Jonathan Samuels, CEO of Octane Capital, added, “The Bank of England’s decision to hold rates may prove a missed opportunity to provide the wider economy with some much-needed stimulus and

with inflation now holding firm for three consecutive months, the case for a modest reduction is becoming increasingly difficult to ignore.

“A further cut would not only have helped ease the cost of living burden but could also have encouraged investment and job creation at a time when business confidence remains fragile.

“For the property sector, a sustained period of stability is always welcome, but additional support through lower borrowing costs would undoubtedly accelerate market activity and drive growth.”

Thomas Cantor, Co-Head of Short-Term Finance at West One Loans, said, “The decision to hold rates, despite inflation tracking at 3.8% and rising uncertainty in the labour market, underlines the cautious approach the Bank of England is now adopting.

“Although many expected a cut, the decision to pause indicates that the MPC is paying close attention to divided internal views and the political and fiscal backdrop ahead of the Autumn Budget. From a specialist lending perspective, it means finance costs remain elevated and confidence may stay subdued until clearer signals emerge on the next move.”