The Bank of England has reviewed the base rate and chosen to keep it where it is. The rate currently stands at 5.25%. If the rate had gone up, this would have been the 15th consecutive rate rise.

While anyone on a fixed-rate deal would not have been affected, those on a standard variable rate or tracker rate mortgage would most likely have seen an increase in their monthly payments.  

You may wonder if this will signal the end of rate hikes and when rates may come down. There’s no way to be sure of what the future holds, and the base rate is unlikely to decrease until inflation comes down. This is because the Bank of England wants to keep spending down rather than encouraging us to go out and spend, which would mean that inflation would increase. There was some good news yesterday that inflation went down by 0.1%. But we’ve got a long way to go yet.

However, the Bank of England’s governor, Andrew Bailey, says that the peak in rates is approaching and recently said that we are now ‘much nearer to the top of the cycle’. That said, the Bank of England is still concerned that inflation could be tough to shift. It has also pointed out that interest rates work with a lag, so the full impact of raising them 14 times since December 2021 has yet to be felt.

more news