🏦 Bank of England holds rates again, what it means for mortgages and the market
The latest Bank of England decision was the most anticipated of the year so far. It kept everyone guessing right up to the last moment.
Experts were divided this month on where the Bank Rate, the official base interest rate, would go. Some expected it to stay put, others predicted a cut.
📉 Why has the rate been held?
The economy and inflation rate were almost certainly the main influences. But both are sending mixed signals.
Last month’s inflation figure came in slightly better than expected. Still, at 3.8%, it remains nearly double the 2% target. Normally, that would argue for keeping rates high or even increasing them.
Meanwhile, the economy is weak. GDP grew by only 0.3% last quarter, and unemployment has risen to 4.8%, the highest since the pandemic. Usually, those numbers might push the Bank to lower rates to encourage growth.
🏡 What it means for mortgages
Lenders do not just follow the Bank Rate when setting mortgage rates. They also look at:
- Swap rates (what banks charge each other to borrow)
- Gilt pricing (government bond rates)
- Their own forecasts of future Bank Rate changes
🔒 Fixed-rate mortgage: No change until the deal ends.
📈 Tracker mortgage: Likely unchanged for now.
💬 Standard variable rate: Might stay the same, but that is up to the lender.
For first-time buyers and those remortgaging, this could bring a small positive. Lenders may start pricing in a possible future cut, making rates a little more competitive.
According to Moneyfacts, the average mortgage rate has now dropped below 5%, the lowest since September 2022.
(Note: This is not financial advice. Speak to a qualified adviser for personal guidance.)
📊 Where could rates go next?
The current Bank Rate is still higher than many expected when the new year began. Some forecasts, including Goldman Sachs, suggest it could fall to around 3% by the end of 2025.
Today’s decision makes a December cut, possibly to 3.75%, look more likely.
But it is not guaranteed. The upcoming Budget on 26 November could shift things again. Higher taxes could cool inflation but slow the economy further.
🏘️ Impact on the property market
Even with the rate held, the overall direction of mortgage costs appears downward. That is encouraging news for home movers and first-time buyers, who can plan with a bit more confidence.
While today’s hold is not dramatic, it still feels like a step in the right direction, steady, predictable, and supportive for the housing market as we head toward 2026.
Thanks for reading
Michael
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