Bank of England Keeps Rates Locked on Hold — A Third Time In A Row
Just the first thing you’d expect when the economy shows no signs of rush-busting – the Bank of England is saying, “We’re sticking to 5.25% for a while.” That’s the headline of today’s market chatter. No drama, no surprise rate cuts, just a calm, steady boat sailing right through December’s MPC meeting.
Why Do They Keep Saying “Same Old, Same Old”?
- September & November: The MPC gave us two “no‑action” lectures because inflation cooled down noticeably.
- Current Situation: Recent data shows that inflation is slipping faster than the BoE predicted, and wage growth has flattened out. Nothing thrilling to shake the pot.
- Economist Snapshot:
- Martin Beck, chief economist at EY Item Club: “December’s meeting is almost assuredly the third consecutive ‘no new tweaks.’ We’re seeing a very calm week; the market is barking in sync.”
- James Smith from ING: “If the markets talk about three cuts in 2024, the BoE’s probably rolling its eyes. They’ll keep their tone cautious, not give us a fresh forecast to spark the conversation.”
Governor Andrew Bailey’s Take
Governor Andrew Bailey has hinted that rates may stay at 5.25% for some time. His message is clear: “We’re not accelerating, just maintaining. Stay a bit restrictive before we decide on the next move.”
What Does This Mean for the Average Brit?
If you’re looking for a new mortgage or planning to borrow, the short answer: rates remain steady. For investors, it means the market will absorb the news at about a 30‑minute pause. The BoE’s strategy is to keep things “tight” until there’s stronger evidence to budge on inflation.
So for the next few weeks, expect the market to calm down, the cash flows to remain unchanged, and the BoE to be patiently watching the numbers. No silver bullets, no quick fixes, just the ongoing rhythm of the monetary policy march.
