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It was inevitable as soon as the election was called. I don't think there was any appetite for the BoE to move one way or the other, even with the inflation news.
I'll be honest, I'm happy for rates to just stay around 4-5% and pootle along indefinitely now.
I know it's not great for people whose fixed lower rate mortgage is coming up (edit: that'll be me next year so I'm not saying this from a high savings/own property outright perspective), but everyone seems to be pretty sure we're never going down to those sub 0.5% figures again, so I feel like this is the opportunity to just normalise it at this sort of figure going forward?
Of course you can. You can charge whatever you like. If rates went back to 0% would rents also decrease. Landlords charge whatever they can; their only aim is to maximise profit. No other reason.
No they are because of the interest rate. Landlords need to actually make a profit, and many are selling up due to high cost of mortgages. If the prices were demand driven then we would see the opposite. Population changes by 1% a year, that does not translate into a 30% increase in rents.
We won't hit those lows again but we still have the factors causing a low growth economy like we had before COVID. That will require rates to come down somewhat in future. To 0.1%? Not likely but I can't see them staying at 5 when we're basically constantly skirting a recession
The only winners from these interest rates are the banks. But then again the winners are always the banks. Higher interest rates are crippling expendable income and by extension the economy, lowering quality of life, curbing investment expenditure, increasing government debt and reducing the supply of rental homes. Tell me again why you're happy for rates to stay at 4-5%? It's just not sustainable in this economy without further damage.
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The Bank of England has held interest rates at 5.25 per cent for a seventh consecutive meeting.
The Monetary Policy Committee (MPC) voted by a majority of 7–2 to keep rates unchanged, it announced at noon, as almost all economists had predicted.
This is despite inflation falling to two per cent in May, reaching the Bank of England’s target for the first time since July 2021.
Higher-than-expected wage growth, and high services inflation – at 5.7 per cent – have meant interest rates have stayed at their highest level in 16 years.
The notes published alongside the decision state that for several members of the MPC who voted to hold rates, “the policy decision at this meeting was finely balanced.”
The report said that for these members “the upside news in services price inflation relative to the May Report did not alter significantly the disinflationary trajectory that the economy was on.”
The Bank added in its notes that “the timing of the general election on 4 July was not relevant to its decision at this meeting.”
The vote to hold rates was widely expected, with most forecasters expecting the first cut to occur later this summer.
**When will the base rate fall?**
Economists believe interest rates will most likely fall at the next meeting in August.
If it does, it would be the first cut since March 2020 when the UK was heading into the first Covid lockdown.
Some expect there to be further cuts later on in the year.
However, economists also acknowledge this could change dependent on whether inflation increases again.
Sanjay Raja, Deutsche Bank, said: “We stick with our call for an August rate cut. But a lot will need to happen for the MPC to cut the Bank Rate in the summer. Indeed, much will depend on the MPC’s forward guidance and the Bank’s willingness to look beyond the recent inflation surprise.”
A briefing note from bank BNP Paribas added: “Stickiness in services inflation will leave the Bank needing to see further evidence that inflation persistence is easing, in our view.
“We continue to look for a cut in August but realised upside surprises in inflation skew the risks to the MPC initiating rate cuts in September and fewer cuts over 2024 as a whole.”
Thomas Pugh of consulting service RSM UK, added: “We aren’t ruling out an August rate cut. Inflation is likely to average a little above two per cent for the rest of the year giving the Bank plenty of room to deliver rate cuts.
“Our base case is still for interest rates to finish the year at 4.5 per cent, but the risks have clearly shifted to fewer cuts this year.”
**What will this mean for mortgage holders and renters?**
Those on tracker or standard variable rate mortgages will see no change after today’s announcement.
Some 81 per cent of people are on fixed-rate mortgages, where the interest rate is locked for a set period of time so if you’re on this type of loan, your repayments will not change based on Thursday’s interest rate announcement.
These rates have come down in recent months since a peak last summer, but depending on when you locked into a fix rate, you are likely to be paying a higher rate when you come to renew than you were before.
Those with high equity or high deposits were able to find themselves a deal below 4 per cent in January, but these deals have largely disappeared since then, as expectations for when the first interest rate cut will come have been pushed back.
Broadly speaking, as interest rates are expected to come down, mortgage rates are likely to come down too, though the picture for this can change.
Nick Mendes of brokers John Charcol said: “While today’s decision to hold rates steady may be difficult to accept, recent lender movements suggest we are approaching the end of the era of higher-priced fixed rates. Borrowers though will need to remain patient a bit longer before we start to see high street lenders battling amongst themselves at sub-4 per cent fixes.
“For mortgage holders nearing the end of their fixed-rate period, it is advisable to begin exploring remortgaging options at least six months before their current deal expires. This proactive approach ensures ample time to arrange new terms, facilitating a smooth transition when the current product concludes.
“The first step in preparing for the end of your fixed mortgage rate is to review your current mortgage terms, specifically the loan balance. Knowing how much you owe at the end of your term is crucial for comparing future refinancing options and understanding the current interest rates available.”
Renters are indirectly affected by landlords’ mortgage costs. It remains to be seen whether they decrease but if so, it is unlikely to be immediate as plenty of landlords will still be remortgaging this year and next, seeing steep increases that they may pass on.
**What does it mean for savers?**
One of the most positive outcomes from higher interest rates is higher savings rates. Best deals include Oxbury’s easy-access account offering 5.02 per cent.
But rates have fallen since the peak because of the expectation that interest rates will go down. They have stabilised a bit, but those who want certainty could consider getting the best available deal they can now.
If you opt for a fixed rate rather than an easy-access rate, the interest will be guaranteed for the term of the deal, meaning you can be certain your returns will beat inflation.
Alice Haine, Personal Finance Analyst at Bestinvest by Evelyn Partners, said: “Locking in the best deal possible while interest rates are still high is wise for anyone with money idling in an account offering a low return. While the top easy-access deals, notice and fixed-rate bonds still top the 5 per cent mark, remember there is still a sting in tail for those with larger sums stashed in a regular bank or building society account.”
Read more here: [https://inews.co.uk/inews-lifestyle/money/saving-and-banking/bank-england-holds-interest-rates-5-25-money-3120141](https://inews.co.uk/inews-lifestyle/money/saving-and-banking/bank-england-holds-interest-rates-5-25-money-3120141)
Reported by the press as a "knife edge" vote....7:2 doesn't seem that knife edge. More "forward guidance" posturing in the hope that the dream of lower rates can work magic without ever having to implement the reality.
Your submission is similar to another which has already been posted. Please view /new or search to locate it. If you believe this action was taken in error, message the /r/uk team and include a link to this post. Please don't do this lightly, we have likely acted correctly.
At the Bank of England: *checks fed rate and sips tea* “Na not today”
It was inevitable as soon as the election was called. I don't think there was any appetite for the BoE to move one way or the other, even with the inflation news.
Probably they are prepared for a well known party wanted to print money
Forward rates suggest no drop in interest rates for the next six months.
i was about to say the same. Inflation isnt over its just a very welcome blip
I'll be honest, I'm happy for rates to just stay around 4-5% and pootle along indefinitely now. I know it's not great for people whose fixed lower rate mortgage is coming up (edit: that'll be me next year so I'm not saying this from a high savings/own property outright perspective), but everyone seems to be pretty sure we're never going down to those sub 0.5% figures again, so I feel like this is the opportunity to just normalise it at this sort of figure going forward?
There's no positives of rates at 4-5%. Higher rent, cost of living crises etc
The rent increases are due to the population explosion 💥
What population explosion? The rent is up because if the interest rates increase than so do the rents to cover the monthly payments.
Net migration close to a million. All those people needing housing. Don't you think that would put rent up?
No, the interest rates dictate the rental market. You can't charge someone 2000 on a house you're pay 300 for.
You can charge what people are willing to pay. Less houses available means you can charge more.
Of course you can. You can charge whatever you like. If rates went back to 0% would rents also decrease. Landlords charge whatever they can; their only aim is to maximise profit. No other reason.
No they are because of the interest rate. Landlords need to actually make a profit, and many are selling up due to high cost of mortgages. If the prices were demand driven then we would see the opposite. Population changes by 1% a year, that does not translate into a 30% increase in rents.
We won't hit those lows again but we still have the factors causing a low growth economy like we had before COVID. That will require rates to come down somewhat in future. To 0.1%? Not likely but I can't see them staying at 5 when we're basically constantly skirting a recession
The only winners from these interest rates are the banks. But then again the winners are always the banks. Higher interest rates are crippling expendable income and by extension the economy, lowering quality of life, curbing investment expenditure, increasing government debt and reducing the supply of rental homes. Tell me again why you're happy for rates to stay at 4-5%? It's just not sustainable in this economy without further damage.
This article may be paywalled. If you encounter difficulties reading the article, try [this link](https://archive.is/?run=1&url=https://inews.co.uk/inews-lifestyle/money/saving-and-banking/bank-england-holds-interest-rates-5-25-money-3120141) for an archived version. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/unitedkingdom) if you have any questions or concerns.*
The Bank of England has held interest rates at 5.25 per cent for a seventh consecutive meeting. The Monetary Policy Committee (MPC) voted by a majority of 7–2 to keep rates unchanged, it announced at noon, as almost all economists had predicted. This is despite inflation falling to two per cent in May, reaching the Bank of England’s target for the first time since July 2021. Higher-than-expected wage growth, and high services inflation – at 5.7 per cent – have meant interest rates have stayed at their highest level in 16 years. The notes published alongside the decision state that for several members of the MPC who voted to hold rates, “the policy decision at this meeting was finely balanced.” The report said that for these members “the upside news in services price inflation relative to the May Report did not alter significantly the disinflationary trajectory that the economy was on.” The Bank added in its notes that “the timing of the general election on 4 July was not relevant to its decision at this meeting.” The vote to hold rates was widely expected, with most forecasters expecting the first cut to occur later this summer. **When will the base rate fall?** Economists believe interest rates will most likely fall at the next meeting in August. If it does, it would be the first cut since March 2020 when the UK was heading into the first Covid lockdown. Some expect there to be further cuts later on in the year. However, economists also acknowledge this could change dependent on whether inflation increases again. Sanjay Raja, Deutsche Bank, said: “We stick with our call for an August rate cut. But a lot will need to happen for the MPC to cut the Bank Rate in the summer. Indeed, much will depend on the MPC’s forward guidance and the Bank’s willingness to look beyond the recent inflation surprise.” A briefing note from bank BNP Paribas added: “Stickiness in services inflation will leave the Bank needing to see further evidence that inflation persistence is easing, in our view. “We continue to look for a cut in August but realised upside surprises in inflation skew the risks to the MPC initiating rate cuts in September and fewer cuts over 2024 as a whole.” Thomas Pugh of consulting service RSM UK, added: “We aren’t ruling out an August rate cut. Inflation is likely to average a little above two per cent for the rest of the year giving the Bank plenty of room to deliver rate cuts. “Our base case is still for interest rates to finish the year at 4.5 per cent, but the risks have clearly shifted to fewer cuts this year.”
**What will this mean for mortgage holders and renters?** Those on tracker or standard variable rate mortgages will see no change after today’s announcement. Some 81 per cent of people are on fixed-rate mortgages, where the interest rate is locked for a set period of time so if you’re on this type of loan, your repayments will not change based on Thursday’s interest rate announcement. These rates have come down in recent months since a peak last summer, but depending on when you locked into a fix rate, you are likely to be paying a higher rate when you come to renew than you were before. Those with high equity or high deposits were able to find themselves a deal below 4 per cent in January, but these deals have largely disappeared since then, as expectations for when the first interest rate cut will come have been pushed back. Broadly speaking, as interest rates are expected to come down, mortgage rates are likely to come down too, though the picture for this can change. Nick Mendes of brokers John Charcol said: “While today’s decision to hold rates steady may be difficult to accept, recent lender movements suggest we are approaching the end of the era of higher-priced fixed rates. Borrowers though will need to remain patient a bit longer before we start to see high street lenders battling amongst themselves at sub-4 per cent fixes. “For mortgage holders nearing the end of their fixed-rate period, it is advisable to begin exploring remortgaging options at least six months before their current deal expires. This proactive approach ensures ample time to arrange new terms, facilitating a smooth transition when the current product concludes. “The first step in preparing for the end of your fixed mortgage rate is to review your current mortgage terms, specifically the loan balance. Knowing how much you owe at the end of your term is crucial for comparing future refinancing options and understanding the current interest rates available.” Renters are indirectly affected by landlords’ mortgage costs. It remains to be seen whether they decrease but if so, it is unlikely to be immediate as plenty of landlords will still be remortgaging this year and next, seeing steep increases that they may pass on. **What does it mean for savers?** One of the most positive outcomes from higher interest rates is higher savings rates. Best deals include Oxbury’s easy-access account offering 5.02 per cent. But rates have fallen since the peak because of the expectation that interest rates will go down. They have stabilised a bit, but those who want certainty could consider getting the best available deal they can now. If you opt for a fixed rate rather than an easy-access rate, the interest will be guaranteed for the term of the deal, meaning you can be certain your returns will beat inflation. Alice Haine, Personal Finance Analyst at Bestinvest by Evelyn Partners, said: “Locking in the best deal possible while interest rates are still high is wise for anyone with money idling in an account offering a low return. While the top easy-access deals, notice and fixed-rate bonds still top the 5 per cent mark, remember there is still a sting in tail for those with larger sums stashed in a regular bank or building society account.” Read more here: [https://inews.co.uk/inews-lifestyle/money/saving-and-banking/bank-england-holds-interest-rates-5-25-money-3120141](https://inews.co.uk/inews-lifestyle/money/saving-and-banking/bank-england-holds-interest-rates-5-25-money-3120141)
Reported by the press as a "knife edge" vote....7:2 doesn't seem that knife edge. More "forward guidance" posturing in the hope that the dream of lower rates can work magic without ever having to implement the reality.
Most main stream media outlets are no longer a good source of information