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Rate rise ‘increasingly unlikely this year’ as Bank of England maintains status quo

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  • 02/05/2019
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Rate rise ‘increasingly unlikely this year’ as Bank of England maintains status quo
The Bank of England has kept its Bank Base Rate at 0.75 per cent.

 

The decision taken by the Monetary Policy Committee (MPC) was unanimous and widely expected by the market.

Santander UK chief economist Frances Haque suggested the Brexit impasse was deterring the bank and no rate move was likely this year.

“Given the continued uncertainty over the timing and nature of Brexit, the decision to hold rates will not be a surprise to the market,” she said.

“While growth in the first quarter of this year looks set to be stronger than previously expected, the MPC continues to be cautious in its approach, waiting until the Brexit outcome is clearer before raising rates further.

“It now looks increasingly unlikely that we will see a rate rise this year,” she added.

Writing in Mortgage Solutions last month, Alex Maddox, capital markets and digital director at Kensington Mortgages noted that capital markets forecast the BoE base rate to hold at 0.75 per cent for the next two years, before rising to one per cent in three years’ time.

 

Low rates won’t last forever

Legal & General Mortgage Club director Kevin Roberts echoed that the decision came as no surprise.

“However, the good news is that the mortgage market remains buoyant,” he said.

“More lenders are now offering mortgages that require smaller deposits, have broader criteria and increasingly competitive rates, helping borrowers looking to take the first or next step onto the housing ladder.

“However, near record low interest rates won’t last forever, so for any borrowers concerned about how a future rise may impact their finances, seeking professional advice is a sensible first step,” he added.

 

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