The Monetary Policy Committee (MPC) has voted once again to hold interest rates at 3.75% at today’s meeting. This was widely expected given the Middle East conflict, higher energy costs and the threat of rising inflation, at the same time as a weakening economy and loosening labour market.
However, unlike the previous meeting, where the nine members voted unanimously to hold rates at 3.75%, this time around one member voted for a quarter-point increase to 4%. The Bank said that while CPI inflation rose to 3.3% in the 12 months to March from 3% in January and February, it is ‘likely to be higher later this year as the effects of higher energy prices pass through’.
Commenting on the decision, Mark Harris, chief executive of SPF Private Clients, said: “A steady approach, rather than a knee-jerk reaction to raising rates, is important for overall market stability and confidence, which is why we welcome today’s decision to hold rates.
“The good news for borrowers is that irrespective of today’s vote, several of the bigger lenders are trimming their mortgage rates even though Swap rates, which underpin the pricing of fixed-rate mortgages, remain volatile. Barclays, HSBC and NatWest, among others, are all reducing their mortgage rates this week. With base-rate trackers falling below 4%, those who don’t need the certainty of a fixed-rate mortgage to help with budgeting are increasingly considering other options. It is worth talking to a whole-of-market broker such as SPF Private Clients to find out what options are available to you.”
Those looking to take out a new mortgage or refinance in coming months should plan ahead as much as possible, seeking advice from a whole-of-market broker such as SPF Private Clients. Rates can be booked up to several months before you need them so it’s worth doing this for peace of mind. If rates have fallen by the time you come to take out your mortgage, you should be able to move onto a cheaper deal at that time.
