Interest rates LIVE: Bank of England to make announcement at noon | Personal Finance | Finance
The Monetary Policy Committee (MPC) will meet today to decide whether to change the Bank of England Base Rate. Most experts predict the MPC will hold interest rates at 4.25% after sticky inflation figures and an uncertain economic outlook.
The base rate significantly impacts the cost of mortgages and loans, and influences the interest rates banks offer on savings accounts. It peaked at 5.25% in late 2023, but policymakers have reduced it to 4.25% in the months since as inflation dropped to more manageable levels. It’s currently rising at a pace of 3.4% – far lower than the 11% highs seen during 2022’s energy crisis, but still higher than the Bank’s 2% target. The Bank of England typically raises interest rates when inflation is high to curb spending and slow price increases.
Matt Smith, mortgage expert at Rightmove, said: “As the rate of inflation stays above 3%, the expectation is that the Bank of England is set to act cautiously. Anticipation had risen that we may be in line for multiple Base Rate cuts this year at the peak of tariff uncertainty, but as some of these pressures have eased, this expectation has fallen back.”
Mr Smith suggested that forecasts for the rest of the year are likely to “jump around a bit” due to ongoing global uncertainty and changes in how the market expects things to pan out.
However, he added: “The current view is that we’re only expecting one more Base Rate cut this year, and [today’s] decision by the Bank of England is likely to be a hold.”
David Hollingworth, associate director at L&C Mortgages added that the Bank of England’s “determination to ensure that inflation can be brought under sustainable control” means a rate cut would be seen as a shock. He said: “Slow and steady is likely to be the message once again, despite the concerns over a contraction in the economy.”
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