Mortgages.scot

My expectation despite the very marginal reduction in inflation was that the BoE would still increase the interest rate to 5.5% today and take their foot off after today providing inflation continues to go down. I was wrong! And I am glad to be wrong. They held at 5.25%.

The voting

There was an entire committee of 9 for the vote. 5 voted to hold at 5.25% and 4 voted to increase to 5.50%. That's how close it was, just one more vote to increase and we would have seen an increase.

Unlucky for some there has been 13 interest rate increases since February 2022. Or to be a bit more dramatic about it, every time the MPC has met to decide on interest rates since February 2022 they have increased interest.

Today seemed like it would never come, the day the MPC votes to either hold/reduce interest.

Outlook

Has the tide turned? To soon to say really. Ultimately the MPC is still very focussed on inflation for a variety of reasons. All today means is that they are comfortable in the direction the we are moving in. If something turns again between now and the next vote in November, could they still increase interest? Of course.

For now a win is a win, certainly in terms of mortgages. This also should see some better rates in the market. Ultimately, however, borrowers should not assume the interest rate will go down, I don't believe there is any prospect of this for the next couple of years at least. If anything it is still more likely the rate will go up than down.