The Bank of England has decided to keep interest rates at 5.25 percent, a 16-year high. For people hoping for easing of pressure on their mortgage payments this isn't great news, however this also means measures taken by the central bank to control inflation are somewhat effective - with the CPI figure now at 3.2 percent, still above the target 2 percent, but far better than the 10 percent early last year.
Mortgage rates have been falling since last August (2023) whilst base rates remained steady at 5.25 percent. A small rise in inflation in January made lenders increase product rates again - due to the underlying swap rates increasing.
On the bright side, rates now are still lower than they were last July (2023), with the average 2-year and 5-year fixed rate deals over 1 percent lower (5.02% and 5.41%, respectively).
Without a crystal ball it's hard to predict where rates are going, and with it likely the housing market, but toward the end of this month the next set of inflation figures (for April) will be released and these will form the basis of whether rates rise, are held, or cut in June. If inflation continues to fall, the first rate cut after this long period of holds will be July/August time. Experts believe the BoE will hit the 2 percent inflation target around that time.
As always, fixed mortgage holders will not be urgently looking at this news (unless they are soon to be remortgaging). Those on variables, discounts and trackers will mostly see no change.