Industry lines up behind rate hold as MPC prepares to vote

Eight in 10 mortgage professionals expect the Bank of England's Monetary Policy Committee (MPC) to hold the base rate at its 30 July meeting, according to a new LinkedIn poll conducted by Mortgage Introducer.

Of 134 respondents, 81% backed a hold when asked what the MPC would do at its next scheduled decision. Meanwhile, 11% predicted a raise, 6% expected a cut, and 2% said the outcome was too close to call.

The results align broadly with market consensus. Financial markets were pricing in a hold at 3.75% ahead of the decision, but traders had brought forward expectations of rate rises further out, with two hikes priced in by March next year as of 22 July.

What is driving the hold consensus?

The MPC last voted on 18 June. The committee maintained Bank Rate at 3.75% in a 7–2 vote, with Megan Greene and Huw Pill dissenting in favour of a rise to 4%.

A softer-than-expected inflation reading for June has since reinforced the hold expectation. The Consumer Prices Index rose by 2.6% in the 12 months to June, down from 2.8% in May, according to the Office for National Statistics, beating the 2.7% forecast.

However, analysts warned the reprieve could be short-lived, with inflation likely to rebound in July after the Ofgem energy price cap rose by 13% at the start of the month.

Paul Heywood, chief data and analytics officer at Equifax UK, said borrowers on variable mortgage rates should not expect relief on their monthly payments this year. "The door looks firmly shut on the prospect of rate cuts for the foreseeable future," he said.

Why a raise still cannot be ruled out

The 11% of respondents who voted for a raise reflect a minority view that has gained credibility in recent months.

Pill, the Bank's chief economist and one of the two June dissenters, told the Walescast podcast on 9 July he believes rates will need to increase this year to keep inflation down.

The market read of the new government's fiscal agenda has added to the complexity. Looser fiscal policy is read as inflationary, and expectations of more borrowing tend to push gilt yields and swap rates higher, which raises, rather than lowers, the path markets price for Bank Rate.

The recently signed US–Iran peace deal had shifted expectations of a near-term inflation spike, easing some pressure on the MPC ahead of July. But analysts cautioned that the full impact of the conflict had yet to filter through to the UK economy.

What does this mean for brokers?

The 30 July decision is the immediate lever for rate strategy conversations with clients. Average two-year fixed mortgage rates had risen to 5.54% at the time of writing, up from 3.63% three months prior on a 60% loan-to-value basis, as lenders repriced ahead of expected future rises.

For brokers, the poll result reflects a profession that is watching closely but not yet willing to call it. The 81% who backed a hold are clearly in step with the market consensus, but with two MPC dissenters already on record and services inflation still elevated, the minority view carries more weight than the numbers alone suggest.

The MPC decision will be published at midday on 30 July, alongside a new quarterly Monetary Policy Report.

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