The Bank of England has held the base rate at 5.25% despite inflation falling to 3.4% on Wednesday.
The Bank’s governor Andrew Bailey said that we are “not yet at the point” with the economy to lower interest rates, however everything is “moving in the right direction.”
Eight members of the Monetary Policy Committee (MPC) voted to keep rates held at 5.25%.
Bailey said, “In recent weeks we’ve seen further encouraging signs that inflation is coming down.
“We’ve held rates again today at 5.25% because we need to be sure that inflation will fall back to our 2% target and stay there.
“We’re not yet at the point where we can cut interest rates, but things are moving in the right direction.”
Jason Ferrando, CEO of easyMoney said, “Despite another surprise dip in inflation this week the Bank of England was always likely to maintain its slow but steady approach to managing the economy by keeping the base rate held at 5.25% for a fifth consecutive decision.
“While this will no doubt disappoint the nation’s homebuyers who have been eagerly anticipating a reduction in the cost of borrowing in 2024, it will add further stability to the property market, whilst also allowing those attempting to form a nest egg a further period of stronger returns on their savings.”
Lomond CEO, Ed Phillips, added, “Having previously endured 14 consecutive base rate hikes since December 2021, it’s been a case of no news is good news for the nation’s homebuyers of late when it comes to the Bank of England’s decision on interest rates.
“That said, they can be forgiven for feeling a little disappointed that we didn’t see a cut materialise today, particularly given this week’s inflation figures.
“While a hold on interest rates has helped stabilise the market, the cost of borrowing remains a significant obstacle for many and while we’ve seen a strong start to the year, a reduction in interest rates would help to open the floodgates and drive market momentum forward.”
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