No change to the base rate, but now the Bank of England is facing mounting pressure to lower it. Discover the details of today’s latest review.

The base rate has remained at 5.25%. The Bank of England reviewed the rate on 1 February and agreed to keep it the same. The base rate has remained at this level since August 2023.

The members of the Bank of England’s Monetary Policy Committee, who vote on rate changes, saw its first three-way split on the decision since the 2008 financial crisis. Of the nine members on the committee who voted on where rates should be, the majority felt the rate should remain the same. However, two members felt it should increase, and one member felt it should be reduced. The latter is the first single vote in the Committee for a reduction since 2020.

When will the base rate go down?

With many mortgage lenders reducing their interest rates lately, you may wonder when the base rate will start to decrease.

It looks pretty likely that the base rate will come down at some point this year, but it’s hard to predict exactly when this will happen. The general view among financial experts is that the rate will decrease this year but not as soon as anticipated. We may not see the base rate go down until the summer, and even then, it’s not guaranteed to happen.

The Bank of England is still trying to bring inflation down and has said it will only reduce the base rate when inflation falls below 2%.

Consumer Price Index (CPI) inflation (which relates to goods and services) crept up slightly in December from 3.9% to 4%. Analysts weren’t expecting this, as inflation had previously been falling faster than anticipated.

Mortgage interest rates more competitive

While mortgage interest rates are more competitive now than last summer, they are unlikely to return to the historic lows we saw before the ill-fated mini-budget was published in September 2022.

If you are due to remortgage in the next six months, don’t be tempted to hold off for a better deal. It’s impossible to make completely accurate predictions about what will happen to fixed-rate mortgage deals.

Don’t put off remortgaging

‘After the increase in inflation in December’s figures, the markets are anticipating another inflation increase when January’s figures are released in the middle of February,’ says MB Associates’ Managing Director, Monica Bradley. ‘We recommend that you secure a mortgage product now so that if rates head the wrong way, you’ve got the most competitive deal.’

Securing a mortgage product now doesn’t mean you’re tied in. If rates fall in the next few months, we can resubmit your application so that you benefit from a lower rate. We will always keep an eye on the market for you and do all we can to ensure you pay the lowest amount of interest for the lifetime of your mortgage.

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