Bank of England Holds Interest Rates

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Bank of England Holds Interest RatesBase rate held at five percent as inflation holds steady.

Bank of England Holds Interest Rates
Bank of England Holds Interest Rates

GENERAL

While the US Federal Reserve has made a large rate cut, the Bank of England has held the base rate of interest at 5 percent. The last time out the Bank decided to cut rates by 0.25 percent to 5 percent. An almost unanimous monetary policy committee voting 8 to 1 in favour of the hold - the one member against wanted to reduce the base rate to 4.75 percent.

The hold comes as inflation remains the same as August at 2.2 percent - holding steady but still above the 2 percent target set for the central bank.

Before rates can come down, which is predicted to happen toward the end of the year, the bank wants to make sure any further inflationary factors are no longer in play.

Experts are predicting that the base rate could fall as low as 3 percent by Summer 2025.

Following today's rate hold, GBP hit a two-year high against USD - at $1.32 for every £1.

Banks are already factoring in the expected drops in the base rate and some lenders are already offering deals with interest rates under 4 percent. However, existing mortgage holders on discounts/trackers/variables will notice no change.

Fixed rate mortgage holders nearing their deal end dates will breathe a sigh of relief at no rate rise, but disappointed at no lower rate deals for remortgaging after today's decision.

The next interest rate meeting is scheduled for November 7th 2024 - a week after the October UK Budget - and as above expected to be a rate cut day.

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