OK, so there was never going to be any surprises this time round as the Monetary Policy Committee, (MPC), once again voted 8-1 to keep rates on hold for the 78th month in a row, but the real interest was around the language used in explaining the decision.
Although some analysts have been more than a little nervous about the large shadow over the sun being cast by China and their issues which could cause a global slowdown, Carney and the MPC seem at pains to suggest that their travails will not serve to knock the Bank of England’s plans out of kilter.
In other words, rate rises are still very much on the horizon sooner rather than later, although they did make a passing comment that the UK is not “immune” to a slowdown triggered by China.
In essence then it is now all eyes on the Fed in the US and to their, potentially monumental decision next week on whether or not they will actually move to increase rates. The UK has usually followed where the US leads in terms of interest rates so if they do move this time, expectation will grow over here.
Whilst the probability of the Fed leading in September is now at 28%, the US economy seems to be on the move again and the real question is whether the economy as a whole is finally ready to take that first, tentative step.
Many think it is and there are many who believe both the UK and the US are in danger of ending up behind the curve if they do not at least start to increase rates soon, leaving them in danger of losing all credibility and being forced into more drastic action down the line.
All of this translates to the fact that borrowers should be checking their options now as it is highly unlikely that the current pricing of low mortgage rates will still be in place this time next year. But then again, we have heard that before!
Over to you Janet…