Bank Base November 2023
The Bank of England Monetary Policy Committee has decided to hold the Bank Base interest rate at 5.25% for the second time in a row, after 14 consecutive rises before that.
The decision was not as close as last months, with six members of the Monetary Policy Committee voting to keep the rate the same; whilst the other three wanted a further increase.
You could almost hear the collective sigh of relief from mortgage borrowers across the country as the Bank of England sensibly decided to keep interest rates on hold once more.
They do now seem to be heeding the warnings from some quarters that going too far with rate rises could cause significant problems for the economy as a whole.
There is some evidence now that inflation is naturally waning, and we could see the pace pick up over the coming months. In fact, there is some debate now as to whether the Bank should start to cut rates in the near future.
However, The Bank of England Governor, Andrew Bailey has said that he expects rates to stay higher for longer as they keep a watchful eye on inflation, ruling out cuts in the short/medium term.
The issue is that as thousands more borrowers come off low fixed rates into the current environment, this could have a profound effect.
The Bank are walking a narrow tightrope now, as their pretty bleak assessment of the overall economic landscape shows, and their next decisions will prove crucial not just for borrowers and the economy at large, but also weigh in on the upcoming General Election next year.
We should continue to see SWAP rates ease gently over the coming days which will give lenders more space for further rate cuts. As competition continues to grow, we could finally be on the cusp of a new rate war.
Watch this space…