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Category: base rate

In the latest Monetary Policy Committee (MPC) meeting, the board of nine agreed that the Bank of England (BoE) Base Rate should be held at 3.75%.

For several weeks in March, nobody could accurately guess what would happen with the vote, due to the widespread economic upheaval caused by the Iran War and Donald Trump’s punitive tariffs.

However, as the dust began to settle, many economists clearly foresaw that the MPC would play their safest hand and keep the Base Rate static for the time being. Their predictions ultimately came true.

Switching strategies

At the start of the year, it was widely anticipated that the MPC would continue their previous plan of cutting the Base Rate at regular intervals.

That all changed after the US-Israel coalition launched devastating strikes against Iran. As well as the immense immediate cost for all countries involved, supply of oil and other vital resources has been disrupted by the war.

A global inflation shock has been widely anticipated. The BoE leaders are primarily concerned with bringing inflation down as much as possible, and cutting the Base Rate at this precarious time could risk destabilising the situation further.

Impact on the mortgage market

As we have previously explained, Swap Rates are more influential on how lenders price mortgages than the Base Rate, and these have been increasing at a rapid pace.

As such, many lenders have wiped their product ranges clean. Across the board, higher rate products have taken their place.

This is an ongoing process, as products are still being withdrawn in large quantities every day. If you want to secure a mortgage, there are still competitive rates out there. 

Our advisors can pinpoint the most suitable deal for you. Contact them today.