Bank of England makes ‘wise and welcome’ decision to maintain base rate at 5.25%

Three members preferred to increase the bank rate by 0.25 percentage points, to 5.5%.

The MPC’s latest projections suggest that monetary policy is likely to need to be restrictive for an extended period of time.

Further tightening in monetary policy would be required if there were evidence of more persistent inflationary pressures.

Industry reacts to Bank of England maintaining base rate at 5.25%

Mark Harris, CEO at SPF Private Clients: 

“As expected, the Bank of England has made the wise and welcome move to hold base rate again at 5.25%.

“The 14 consecutive rate rises before September’s pause have been painful.

“Today’s decision will raise hopes that base rate has peaked, allowing the dust to settle rather than causing further anxiety and distress for borrowers.

“Those hoping rates will move swiftly downwards could well be disappointed; we expect a period of around six months during which rates will plateau, followed by a gradual reduction in base rate to ‘normalised' levels of around 3%.”

Mike Randall, CEO at Simply Asset Finance: 

“A steadying of interest rates will undoubtably relieve some pressure for small businesses, but there are still fundamental problems to be solved if they are to thrive in the coming year.

"These are firms that have remained unwaveringly resilient in the past few years, facing stubborn inflation, some of the highest interest rates on record, persistently high energy costs and ongoing supply chain issues.

“Yet support available to small firms — which represent 99% of UK business — has still remained limited, and in some cases has been cut back in recent months.”

John Phillips, CEO at Spicerhaart and Just Mortgages: 

“It is encouraging to see the Bank of England continue to hold the interest rate, as the markets and the majority of economists expected.

“In reality, it feels like the only logical move as it’s still too soon for any reduction, and an increase would just lump further misery and uncertainty on borrowers — especially as the Bank of England itself still doesn’t yet know the full extent or impact of its 14 previous rises. 

“While inflation stagnated in September, the general consensus is it will continue its downward trend.

“In the mortgage market, today’s news will hopefully offer some stability and give lenders the confidence to take a further look at their books and continue to price more competitively.”

Alex Lyle, director at estate agency Antony Roberts: 

“This autumn, we’ve found that buyers relying on mortgages to fund their purchase have been waiting to see what happens with pricing, as this has such an impact on affordability. 

“Another interest rate hold will be viewed as a further little pigeon step in the right direction, giving hope that longer-term stability on rates is on the way.

“This should fuel confidence in those who have been anxious about committing to a property purchase.”

Andrew Gething, managing director at MorganAsh: 

“After so many successive rises, news that the base rate will remain unchanged is certainly positive.

“This continuity will be most welcome among the proportion of borrowers who are on tracker or variable rate mortgages, providing some much-needed certainty for what will be one of their largest monthly outgoings.”

Duncan Kreeger, CEO and founder of TAB: 

“The Bank of England’s decision to maintain the basic rate of interest at 5.25% for a second time brings some much-needed stability to the market and will undoubtedly be a welcome boon for investors, developers, and lenders.

“We've seen a noticeable pickup in activity since the previous decision to hold rates, and we hope this positive momentum will continue over the coming months as we all adapt to the changed interest rate environment.

“With lenders taking steps to reduce rates, directly benefiting borrowers and increasing the viability of many projects and purchases, we anticipate this positive shift to ripple across the industry, providing the foundation for a positive Q4 and 2024."