The Bank of England (BoE) has held its base rate at 0.1% despite expectations that there could have been a rise.
The BoE’s Monetary Policy Committee (MPC) voted seven to two in favour of keeping the rate where it stood.
John Goodall, chief executive of Landbay, said: “The ‘will they, won’t they’ scenario of the past few days in anticipation of whether the Monetary Policy Committee would raise Bank base rate is emphasised by the differing views of the MPC members.
“There is still uncertainty in the economy and we should know a bit more in the new year. I think we are looking at January now for the rate increase as December and the run up to Christmas is probably not the best time. I believe base rate will go up to 0.25% with possibly a couple more rate rises in 2022 to take it up to 0.75% this time next year.”
Reece Beddall, sales and marketing director at Bluestone Mortgages, added: “Although a rise in interest rates looked on the cards, today’s decision comes as welcome news to both prospective and existing borrowers.
“However, low interest rates can’t last forever, and looking ahead, the challenge will be how we can best support the growing number of customers who find themselves in difficult financial situations.
“As an industry, it is our moral obligation to signpost these customers to the best available options so that they, too, can have the opportunity to climb on to or up the property ladder and achieve their homeownership dreams.”
Kevin Roberts, director of Legal & General Mortgage Club, said: “Despite growing pressures to tackle rising inflation, it is encouraging to see today’s decision not to raise the UK base rate.
“Amidst unwinding government support, helping to keep borrowing costs to a minimum will support people across the UK by ensuring their mortgage and credit repayments remain at historic lows.
“Whilst a low rate should keep the market competitive, for those worried about the future of their mortgage, along with those simply coming to the end of their existing mortgage term, the key now is to seek advice. Mortgage advisers are on hand to help clients secure the best possible mortgage for their individual needs.”
Frances Haque, chief economist of Santander UK, added: “There has been much speculation as to whether the MPC would raise Bank Rate at this meeting given the larger than predicted increases in energy prices and a concern around spiralling wage growth.
“Although September saw a slight fall back in inflation to 3.1% it still remains above the Bank of England’s target rate of 2%. With a new set of forecasts being published today in the Monetary Policy Report, the market’s view was that the MPC might use this opportunity to increase Bank Rate.
“At the next meeting the MPC should be able to get a preview of the labour market data to be published by the ONS and therefore the possibility of a rate increase remains very much alive.”
Vikki Jefferies, proposition director at PRIMIS, said: “Today’s decision to maintain the rate at 0.1% is undoubtedly good news for borrowers and will continue to fuel the extremely competitive market brokers and their clients have enjoyed over the past year.
“However, we have seen a cluster of high-street lenders hiking their rates ahead of the rate decision, and this trend is likely to continue. Rates can’t stay at sub-1% forever, so it’s key for borrowers to act first to lock in savings while they last.
“The opportunity for brokers in this climate is huge. Borrowers will be keen to ensure they fix into the best possible deal, and brokers are in the best position to help them to do just that.
“For those with complex financial situations, seeking advice is more important than ever, and brokers should act now to help their customers lock into appropriate, affordable products while they can.”