The Bank of England has announced its decision to keep Interest Rates at 5.25 percent.
The decision was made at noon today. It has since been held at 5.25 percent from August 2023.
This decision is consistent with expert’s predictions that the rate would be held for the ninth consecutive month.
The Bank said: “Seven members (Andrew Bailey, Sarah Breeden, Ben Broadbent, Megan Greene, Jonathan Haskel, Catherine L Mann and Huw Pill) voted in favour of the proposition.
“Two members (Swati Dhingra and Dave Ramsden) voted against the proposition, preferring to reduce Bank Rate by 0.25 percentage points, to 5 percent.
Andy Mielczarek, CEO of Chetwood Financial, said: “Any call to race ahead of the fed and cut the base rate early would have been short-sighted.
“Holding at 5.25 percent was the right decision by the Bank of England, as there remains enough uncertainty and stickiness around inflation to merit caution for a while longer.”
Mr Mielczarek continued: “The reality is that despite recent decreases in inflation, we have yet to hit the Bank’s 2% target. We are seeing signs that the economic landscape is warming, so we must ensure that we have the stability and resilience necessary for future growth.
“A high-interest environment means difficulties for those with variable mortgage payments contributing to an already-high cost of living, but these are necessary evils for the UK’s economic recovery.
“As long as the base rate stays high, savers need to shop around to maximise the returns they are getting from the savings market and get their financial goals back on track.”
Lily Megson, Policy Director at My Pension Expert, said: “While high interest rates are often touted as good news for savers, the harsh reality is that an unchanged base rate feels like Groundhog Day for Britons.
“Indeed, the hold comes hand-in-hand with the ongoing burden of sticky inflation and the weighty cost of borrowing. For some savvy savers, there is a silver lining to continued higher rates – namely, strong returns on fixed-term products like annuities. Yet in truth, inflation has not fallen quickly enough, with millions struggling to save for long-term goals such as retirement.
“People should not be left to weather this storm alone, as the government has a critical role to play in ensuring access to independent financial advice and guidance for all. And with a general election fast approaching, it’s in their own interest to take action sooner rather than later.”
Alastair Douglas, CEO of TotallyMoney said: “Today’s figures show a drop in consumer confidence for the first time in seven months — as people are growing increasingly concerned about their household finances, job security and business activity.
“We need to see a better show of leadership from the Bank of England, along with an indication of the impact their monetary policy is having on the economy, and clear direction of what we should expect for rates.
“Over the past two years, the Bank has struggled with its forecasting, predicting a year-long recession, and not factoring the impact of wage rises on inflation. Some think it was slow to increase rates, and the worry now is it’s taking too long to cut them.
“Now more than ever, we need stability, but continued uncertainty is continuing to impact people’s lives. As thousands of low rate mortgages come to an end each day, banks are increasing the cost of new deals, and customers are unsure whether they should fix a new offer, sit on a tracker, or gamble on the SVR in the hope of a brighter future.”
