Base rate held

Michael Lloyd

December 19, 2019

BoE Money and Credit - mortgage approvals

The Bank of England’s Monetary Policy Committee has voted by a majority of seven to two to hold the base rate at 0.75%.

The move had been widely expected with a potential increase now seeming distant.

Frances Haque, chief economist at Santander UK, said: “The decision to hold rates was widely expected given the outcome of the General Election increases the certainty of the UK leaving the EU at the end of January, reducing the risk of a continuing “slow puncture” in the UK economy.

“The economic data published so far for the last quarter of this year indicates that growth will likely be weak or perhaps even negative and continues to depend on consumer spending to fuel growth.

“However, with inflation well below the target rate and with the likelihood of reduced uncertainty, at least in the short-term, the MPC is clearly standing by its cautious approach and will wait to see what type of momentum is carried into the beginning of 2020.

“This, along with understanding what the next Budget will bring, will be crucial in determining the MPC’s next move.”

Kevin Roberts, director, Legal & General Mortgage Club, added: “While the base rate has been held today, last week’s election result looks to have buoyed the market and reassured consumers to press ahead with their homeownership plans.

“For existing and prospective homeowners there are some excellent deals available on the market right now and it’s a great time to lock into a new mortgage.

“Whether buyers are opting for a fixed or variable rate product, speaking with an independent financial adviser is the logical first step.

“Having a professional on your side to guide you through your full range of options, as well as other important considerations like protection, is a great way to save money, time and gain valuable reassurance that you’ve made the right decision.”

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