Interest Rates Held again at 5.25%
Voting at the Monetary Policy Committee resulted in the interest rate being held at 5.25%. The rate has been holding at this level since August 2023.
The voting
There was an entire committee of 9 for the vote. Six voted to hold at 5.25%, two voted to increase to 5.50%, and one voted to reduce to 5%. Still, some believe that the rate is not high enough, but there is no real suggestion of rate reduction based on the voting.
| Member | Direction | Amount |
|---|---|---|
| Andrew Bailey (Governor) | Hold | 5.25% |
| Ben Broadbent | Hold | 5.25% |
| Huw Pill | Hold | 5.25% |
| Dave Ramsden | Hold | 5.25% |
| Megan Greene | Hold | 5.25% |
| Sarah Breeden | Hold | 5.25% |
| Jonathan Haskel | increase | 5.50% |
| Catherine Mann | increase | 5.50% |
| Swati Dhingra | Decrease | 5% |
Outlook
Whilst the voting shows no sign of voting towards a reduction other than one vote, the Bank of England does suggest it may be coming. They have at least discussed the potential to reduce interest. This is likely a result of inflation expected to fall quicker this year.
Although discussing it, I do not foresee there being a reduction until the committee is certain inflation is fully under control. I can't recall the last time there was a mix of hold, increase and reduce voting with the MPC. That may be something or nothing.
As always, if I was to bet on it, I would suggest the rate will drop by the end of Q2 2024.
Lee Wisener, CeMAP, CeRER, CeFAP
Having worked in the mortgage industry for over 20 years I have always wanted to build a website dedicated to the subject. Also being a geek when it comes to the internet all I needed was time and I could both build the site from scratch and fill it with content. This is it!
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