The Bank of England have today announced that they are … HOLDING rates at 0.5%.
After much speculation over the past few years that the next move would be upwards, remember Mark Carneys “At the turn of the year” comments, the situation Post-Brexit vote has changed everything and there was an 80% expectation that rates would be cut.
In deciding to keep the Bank Base rate at its current historical low of 0.5% rather than cut further as many expected, the Governor has yet again adopted a wait and see approach rather than immediately delivering on his pledge to help try to boost an ailing, post-Brexit economy.
Whilst this may flummox the markets yet again after his recent speech, it was always the case that August was a more likely time to take action after having garnered more economic data after the Brexit decision.
Should the Governor eventually cut rates by 0.25%, the immediate benefit of such a cut will be felt by those mortgage borrowers with a tracker product who should see their monthly payments reduce by approximately £11.43 per £100,000 borrowed on an average 25-year repayment mortgage or £20.84 if interest only.