One member of the committee voted to reduce the rate to 4.25%.
This follows August’s rate reduction from 5.25% to 5%, the first time the rate had been brought down since March 2020, during the pandemic.
According to the BoE, monetary policy decisions were guided by the need to “squeeze persistent inflationary pressures out of the system so as to return CPI inflation to the 2% target both in a timely manner and on a lasting basis.”
Members of the specialist finance industry have reacted to the latest news from the BoE:
Ben Thompson, deputy CEO at Mortgage Advice Bureau:
“It’s business as usual, in terms of interest rates. But there’s no need to worry, as this was signalled for some time and it was always unlikely for the bank to cut rates in consecutive months so early on in the cutting cycle.
“September has already seen cuts across the mortgage market for those refinancing, and with innovations and reductions also coming for first time buyers, it’s shaping up to be a positive autumn in the housing market.
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“For those yet to start on their journey to homeownership or for those soon to refinance, speak with a broker to get mortgage ready.”
Mark Michaelides, CCO at Molo:
“The BoE’s decision to hold the base rate at 5%, despite Wednesday’s encouraging headline inflation reading and the Fed’s 50bps reduction overnight, reflects ongoing caution in the face of persistent inflationary pressures in the services sector.
“We do however expect further rate cuts to come in the autumn, which will provide an immediate boost to existing borrowers on variable rates and those looking for new fixed rate deals.”
Gareth Lewis, managing director at MT Finance:
"Today's decision to hold rates steady reflects the reality of the current economic landscape. This is indeed a prudent move that signals stability.
“For property investors, this decision may create a stronger demand for alternative financing solutions such as bridging loans.
“A measured approach is key, and we anticipate that a rate reduction is on the horizon as inflationary pressures continue to ease.”
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