The Bank of England has kept interest rates unchanged at 3.75 per cent as policymakers warned that uncertainty over energy prices and inflation remains a major threat to the UK economy.
The Monetary Policy Committee voted by seven to two to leave borrowing costs untouched at its latest meeting, with two members — Megan Greene and Huw Pill — arguing for a quarter-point increase to four per cent.
The decision comes as the Bank continues to assess whether recent global shocks, particularly rising energy costs linked to instability in the Middle East, could feed into inflation and delay further rate cuts.
Managing Director of Sales for Foxtons, James Stevenson, said: “Today’s decision was widely expected and reflects continued caution from the Bank of England as it balances the need to support economic growth against lingering inflationary pressures.
Whilst rates may not have fallen at the pace many anticipated, the UK property market has remained remarkably resilient, with values holding up well compared to this time last year.
We’re seeing a market of committed buyers. The people getting in touch are serious, well-researched and ready to move. For anyone waiting for the perfect rate climate, the wait carries its own risk. Even if you could time the bottom, lower rates bring buyers back all at once, and that competition is what costs you the home you want.
For sellers trading up, a softer market is your friend. If prices ease, the larger home you’re buying tends to fall by more in pounds than the one you’re selling, so the gap you actually pay to move up shrinks. That gap is what matters, not the headline figure on either side.”
Verona Frankish, CEO of Yopa added: “Today’s decision to hold the base rate comes as little surprise and, importantly, it provides a c alike.
The property market has demonstrated remarkable resilience so far this year, with buyers continuing to transact despite higher borrowing costs than many had become accustomed to prior to 2022. Whilst a rate cut would undoubtedly have provided an additional boost to sentiment, consistency and predictability remain valuable in their own right.
With inflationary pressures yet to disappear entirely, a measured approach from the Bank of England is understandable and we expect the market to maintain its current level of momentum as a result.”
Jonathan Samuels, CEO of Octane Capital said: “Another hold was the overwhelming expectation and the Bank of England has once again opted for caution over commitment.
Whilst inflation has eased considerably from its peak, policymakers remain mindful of the risks associated with moving too quickly and today’s decision reflects that balancing act.
The challenge now is less about the direction of travel and more about the pace. Markets are increasingly comfortable with the idea that rates will fall further over time, but continued uncertainty around when those reductions might arrive risks dampening confidence across borrowing-dependent sectors. Stability is welcome, but clarity is equally important.”
Chris Hodgkinson, Managing Director of House Buyer Bureau added: “Today’s decision is unlikely to come as a disappointment given that a hold was already widely anticipated, but neither will it provide much of a catalyst for those waiting on the sidelines.
The housing market has continued to function despite elevated borrowing costs, however many buyers and sellers remain highly sensitive to affordability and are looking for stronger signals that mortgage rates will ease further over the months ahead.
For now, the Bank of England has chosen to prioritise stability and that’s understandable given the wider economic backdrop. But until we see a more meaningful reduction in borrowing costs, market activity is likely to remain driven by necessity rather than confidence.”
Leave a Comment