Bank of England Sticks With 5%—Borrowers Get the Short End
The Bank of England decided not to budge on interest rates, keeping them locked in at 5%. That means the good news for borrowers that was brewing last month evaporated on Thursday.
Why the Rate Hold Matters
- Borrowers, take a deep breath. A higher rate means higher monthly payments for mortgages, loans, and everything else that needs a bit of borrowing.
- Economists, get that coffee. The policy keeps inflation in check but doesn’t help the households that were hoping for relief.
Last Month’s Heat‑Up
Back in August, the Bank cut rates by 25 basis points to 5%. That move sparked a belief that more reductions were on the horizon. The puzzling reality? The bank’s latest decision defied that expectation.
Andrew Bailey’s Take
“We ought to taper gains over time,” explains Bank chief Andrew Bailey. “But inflation must stay low—so we’ll be cautious not to slash too quickly or too sharply.”
Financial Analyst Voices a Caution
Susannah Streeter, head of money and markets at Hargreaves Lansdown, noted some growing concerns:
“Core and services inflation are rising, so the Bank might be a bit more hesitant about further cuts.”
Market Predictions
Markets already account for a likelihood of 73% that rates stay on pause this month, with anticipation that any cuts may come later in the year—probably November or December.
What This Means for You
- Expect your loan payments to remain steady, at least for now.
- Keep an eye on the next few months for potential rate moves.
- Stay tuned to the Bank’s guidance—it could shift if inflation ripples stir.
