Bank of England Announces Interest Rates Remain Unchanged at 5.25%

Today the Bank of England has announced that interest rates will remain the same at 5.25%, and unchanged since August. The decision has come from a 6-3 vote in favour of holding the rates, whilst the minority of voters wished to raise interest rates again to 5.5%. While the base rate remains unchanged, the monetary policy committee explained that rates will remain high for an “extended period of time.”

The central factor motivating this choice is the elevated inflation rate of 6.7% in September, which remains three times higher than the intended target of 2%. The Bank expects a sharp slowdown to 4.8% in October and says it will fall further next year, as energy and food price rises ease.

What does this mean for the property market?

Sourced Property Group’s MD Chris Kirkwood says,

 “In our current market landscape, we find ourselves in a situation that has persisted for several months – a buyer-led market. Buyers have assumed a dominant role, primarily due to the ongoing scarcity of interest rates. This scarcity has led to a reduced number of buyers in the market. However, the volume of available property deals remains consistent. Consequently, buyers hold the reins, influencing price trends and driving substantial negotiations.”

In summary, the Bank of England’s decision to keep interest rates at 5.25% in the face of elevated inflation reflects its commitment to supporting economic stability. The choice to maintain these rates, despite a minority advocating for an increase, underscores the central bank’s cautious approach to managing the UK economic landscape. For those in the property market, the current scenario of high-interest rates continues to shape a buyer-led market, with opportunities arising for motivated sellers.

The next time the Bank of England will review interest rates will be 14th December.

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