Central bank's decision was widely expected by markets
The Bank of England (BoE) decided to keep interest rates at 5.25% for the second consecutive meeting, at noon on Thursday.
The bank’s Monetary Policy Committee has maintained the base rate at its highest level in more than 15 years after ending the streak of 14 consecutive rate increases at its previous meeting in September.
The BoE decision was widely expected by financial markets, which on Wednesday indicated a 93% probability of a second consecutive rate hold.
“Todays ‘hold’ announcement has been widely anticipated by the markets and commentators, with any further rate hikes looking increasingly unlikely,” Nicholas Mendes, head of marketing at independent mortgage broker John Charcol, commented.
“UK economic activity is weakening, and inflation is on a downward trend. Now is the time to pause and monitor rather than adding further pressure on to borrowers and consumers. I am sure in the MPC minutes to follow, there will still be signs that rates could rise if data indicates further action.”
Experts were more confident that the bank rate would not be hiked this time as the annual inflation rate in the UK remained at 6.7% in September, slowly declining from its recent peak of 11.1% in October last year.
“In the months following the Bank of England’s decision to hold interest rates at 5.25%, we’ve seen a gradual emergence of opportunities for first-time buyers, giving mortgage lenders and banks the time to suitably adjust their operations,” David Hannah, chairman at property tax advisory Cornerstone Group, said. “Subsequently, this has allowed for a flurry of new products to enter the market.
“While the market conditions may not be optimal today, if rates remain where they are and hopefully even start to fall, we will see continued growth in the number of first-time buyers taking their first step on the housing ladder.”
In the US, the Federal Reserve also held interest rates at a 22-year high for a second straight meeting amid stubborn inflation, yesterday. Last week, the European Central Bank also kept rates at 4%, opting to pause after 10 consecutive hikes.
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