Bank of England interest rates decision: industry reacts

The Bank of England’s Monetary Policy Committee decided to hold interest rates at 3.75% today, amid continuing Middle East tensions and political uncertainty.

It means the cost of borrowing may not drop any time soon, so mortgage rates for homebuyers could remain high.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says:  “The recent fall in inflation has given the Bank of England some respite from cost-of-living pressures which have been building since resumption of the Iran War hostilities, and explains this hold.

“However, the relief is likely to prove short-lived as the impact of oil, energy and other prices will probably prove harder to manage when the next decision-time for rates comes around.

“The level of interest rates is so crucial, particularly at the moment, to maintaining activity, not just in the price-sensitive housing market but across the wider economy where stability is key.”

Nathan Emerson, Chief Executive at Propertymark, says: “By holding interest rates, the Bank of England has opted for a measured approach as inflation remains above its 2 per cent target. While price pressures have eased in recent months, today’s decision reflects the need to ensure inflation continues moving in the right direction before further policy changes are considered.

“A stable base rate provides greater certainty for the housing market. It gives lenders more confidence to continue offering competitive mortgage products while allowing buyers to make informed financial decisions. Savers also continue to benefit from relatively attractive returns on savings, helping some prospective homeowners build towards a deposit.

“However, inflationary pressures have not disappeared. Higher household costs, including July’s increase in the energy price cap, alongside ongoing uncertainty in global energy markets, mean the Bank of England is likely to continue taking a cautious, data-led approach over the coming months.”

Nick Leeming, Chairman of Jackson-Stops, says: “Today’s decision to hold the Bank Rate avoids adding further immediate pressure on households and gives the housing market continued policy stability.

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Author: Gemma