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BANK OF ENGLAND VOTES TO HOLD THE BASE RATE AT 5.25 PER CENT IN FEBRUARY 2024

SPF

Picture of Mark Harris

Mark Harris

Chief Executive

The Bank of England has held base rate at 5.25 per cent for the fourth consecutive meeting of the Monetary Policy Committee.

The decision was widely expected by the markets as it looks as though efforts to bring inflation under control are working, while it reinforces expectations that the next move in rates will be downwards.

The MPC voted by a majority of six to three to maintain Bank Rate at 5.25 per cent, with two members preferring a 0.25 percentage points increase to 5.5 per cent, while one member voted for a quarter-point reduction to 5 per cent.

Expectations are growing that we will see base-rate reductions in coming months, with bank rate potentially falling to as low as 4 per cent by the end of the year, assuming inflation also continues to move towards its 2 per cent target.

Fixed rates are influenced by future base-rate movements and therefore not directly linked to what is decided this week. Many lenders have been reducing their fixed rates since the start of the year on the back of a fall in Swaps, which underpin the pricing of fixed-rate mortgages. While the days of rock-bottom mortgage rates are long gone and borrowers must get used to a higher interest rate environment, we expect pricing to ease further in coming weeks.

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