Mortgage industry split on MPC as rate hike threat grows

More than half of mortgage professionals expect the Bank of England's Monetary Policy Committee (MPC) to hold the base rate at its 17 September meeting, but the case for a rise is growing, according to a new LinkedIn poll conducted by Mortgage Introducer.

Of 133 respondents, 57% backed a hold when asked what the MPC would do at its scheduled decision on Thursday. But 35% predicted a raise – a dramatic shift from the July poll, in which just 11% of respondents called a hike. Two per cent expect a cut, while 7% said the outcome is too close to call.

The shift in sentiment comes after UK inflation accelerated to 3.1% in August, well above the Bank's 2% target, pushing brokers and advisers to reassess what had, only recently, looked like a straightforward hold.

The Bank has held the base rate at 3.75% for five consecutive meetings since December, following a 6–3 vote in July in which three members dissented in favour of a rise to 4%. With inflation now above 3% and swap rates climbing sharply, that minority view looks considerably less isolated.

Why a rise still cannot be ruled out

The 35% who voted for a raise reflects a minority view that has gained significant ground since July. Major lenders have already moved, raising mortgage rates twice this month ahead of the MPC decision.

Carl Parker, national director at Just Mortgages, said the inflation reading was unwelcome but unsurprising. "We know the longer-term picture is likely to be less positive – particularly as the Iran conflict rages on and oil prices climb in response." He stopped short of calling a hike but warned the direction of travel was clear. "We do have to prepare for the prospect of a rate rise in the near future if inflation accelerates further."

Nathan Emerson, chief executive of Propertymark, said the decision would be closely watched for its effect on housing. "With inflation tracking upwards, tomorrow's base rate decision will be closely watched and could have a direct impact on the housing market as we head towards the Autumn Budget. The housing market remains finely balanced, with key factors such as higher food and energy costs continuing to weigh on consumer confidence and ongoing affordability."

What does this mean for brokers?

Thursday’s decision is the immediate lever for rate strategy conversations with clients. Parker noted a modest bounce in buyer registrations in September, suggesting some borrowers were pressing ahead despite the uncertainty. But he was clear on where the profession's focus should lie. "Rather than sticking our heads in the sand, we have to be there for those clients who are trying to make moves, capitalise on opportunities and funding still available in the market and secure deals before any further changes."

The MPC decision will be published at midday on Thursday.

Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.