Bank of England Keeps Rate Steady as Labour’s Dream Crumbles
In a decision that would give the Labour party a fresh reason to sigh, the Bank of England’s Monetary Policy Committee (MPC) announced that the base rate will stay parked at 4.75% this week. It’s just another hit on the party’s hopes that the economy can cool off without the need for a hard empty‑seat real‑estate price drop.
Inflation Took a Stubborn Stance
- Official data released Wednesday shows the consumer price index climbed 2.6% in November, up from 2.3% a month earlier.
- That puts inflation a few points above the BoE’s 2% comfort band.
- With the Bank pausing rate cuts, the price‑mountains may keep rolling upward.
Industry Insight: Too Much Too Soon?
Rob Morgan, Charles Stanley’s Chief Investment Analyst, warned that the Bank was now “wary of loosening too much too soon.” He added:
“Fiscal policies from the Budget could stir the inflation engine again. Higher National Insurance, a revised minimum wage, and other costs way up will do nothing but fuel a lively cost trend in the services sector.”
“Employers might feel a little keener on corporate margins, but most of this hit fizzles out here–in the market as higher consumer prices.”
What’s the Big Picture for the Rest of 2025?
Lily Megson, Policy Director at My Pension Expert, hammered down the obvious:
“The Bank keeping the rate steady is expected after months of inflation climbing. That said, the economy isn’t a walk‑through that’s entirely predictable.”
“Savers—especially those eyeing retirement—need to consider how shifting rates will throw them a curveball in the months ahead. Short‑term rate hikes might look attractive, but longer‑term pension plans are still a must‑do.”
“People won’t be left to fend for themselves amid turbulent headwinds; the government must step up to offer financial support, education, and advice.”
“Independent financial advice remains a staple in 2025, and policy makers must encourage the public to engage with retirement plans to reach their financial objectives.”
Real Estate: The Short‑Term Promise
Ben Nichols, Managing Director at RAW Capital Partners, cautioned:
No early Christmas gift, but the Rate Cut trail is off the table for now because of lingering inflation concerns. Fortunately, the outlook for cuts in 2025 looks promising.
“Governor Bailey hinted the MPC might orchestrate up to four cuts next year. Another cut could materialize as early as February – and the property market would take a wholesome sip of relief.”
“Higher borrowing costs will still nag property investors. Good data on buyer demand is reassuring, but lenders and brokers need to stand firm and be transparent with clients while waiting for BoE to loosen policy.”
“Flexibility, commitment, and clear communication will remain key for lenders moving forward.”
Takeaway
While the BoE’s decision keeps the base rate steady for now, the upcoming tweaks and inflation trajectory will become the most watched events of 2025. Investors, savers, and property seekers need to keep their ears to the ground and stay ready for the next move.
