Bank of England Holds Rates at 4.5% – Mortgage‑Heads Take a Numb Dip
In a move that feels like a stubborn stubborn adult refusing to grow up, the Bank of England kept its base rate stubbornly at 4.5%. The big idea? Chill the heat that’s been cooking up prices and inflation. But for those of us juggling an 8% mortgage, the outcome is a sigh‑filled shrug and an endless hunt for a way to lower monthly bills.
What the Policymakers Are Saying
Andrew Bailey, governor of the Bank: “We’re playing the long game – a gradual, careful step‑down of the rate, hoping that tide‑turning will happen eventually. The world’s still a circus, so we must be careful.”
Paul Heywood, chief data officer at Equifax UK, called the decision “a sign that rate cuts for homeowners are unlikely at this month’s meeting.”
Nomura Bank analysts George Buckley and Andrzej Szczepaniak forecast that we could see 100 basis points of cuts, trimming the rate to around 3.5% by early 2026.
Mortgage‑Morning Musings from the Experts
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Alastair Douglas, CEO of TotallyMoney:
If you’re waiting for a rate cut to switch gears on your mortgage, why not lock a new deal now? The Standard Variable Rate is 6.75% today, but you might end up paying up to eight percent! Banks may already have baked any future cuts into their pricing, so the shake‑up could be minor at best.
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Thomas Pugh, RSM UK:
“The next cut will probably hit in May.” He pointed out that average regular pay rose 5.9% over the past three months to January – the highest jump since last April. He sees a slight slowing next year as businesses pause hiring post‑Budget, but wages are still too hot for the Monetary Policy Committee to let the kettle cool.
Why You Might Still Be Feeling the Pinch
Even though the Bank’s thermometer is steady, the cost of borrowing keeps its legs tight. With mortgages at 8%, every extra pound of interest translates into larger payments that trickle down your wallet. In a world where the Bank “plays it slow,” the window for relief feels more like a long‑needle watch than a quick glass of molasses.
Bottom Line: Tip Your Knife and Keep an Eye Out
For the long‑haul of beating the inflation monster, stay nimble – watch rate changes, consider lock‑in offers before your bank pushes you onto a higher variable rate, and keep your eye on wage growth. The shuffle is slow but doesn’t mean you’re stuck forever.
