The Bank of England has revealed its latest decision on base rate – which in turn has a strong influence on interest rates.

Its monetary policy committee has agreed to keep base rate at 5.25 per cent.

The Bank has been hiking rates since December 2021 in an effort to tackle inflation in the UK, which is running at 6.7 per cent – far above the 2.0 per cent target rate agreed.

In the minutes from its latest meeting, the MPC says that since June inflation had fallen much faster than expected to 6.7 per cent in August.

Simultaneously there were “increasing signs” that higher rates were starting to hurt the UK economy.

For these reasons the MPC says it kept rates on hold but warned they must remain “sufficiently restrictive for sufficiently long” to get inflation back down to 2.0 per cent.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, states: “The unexpected fall in inflation made this interest rate decision harder than it might have been. Last week it was an odds-on certainty that rates would rise by at least a quarter point but the climate has since changed.

“What it does show is that it is dangerous to make a snap decision based on one month’s figures and then regret it later.

“Stability is so important to the property market and brings confidence to buyers and sellers sitting on the fence finding it difficult to budget before deciding to make their moves. This hold, after many months of rises, will bring some welcome reassurance.”

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Director of Benham and Reeves, Marc von Grundherr, says: “Today’s freeze will be a small victory for the nation’s homebuyers who have seen the financial goal posts move constantly in recent months. But despite rates remaining unchanged there will still be a real worry for those coming to the end of a fixed rate term, having previously locked in at a relatively affordable rate when they first purchased. 

“When their mortgage term does expire, they are likely to find that the cost of their monthly repayments has risen considerably and this is really the last thing anyone wants to contend with, not only with the current cost of living, but with Christmas just around the corner.”

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And Managing Director of Barrows and Forrester, James Forrester, comments: “Good news for borrowers and today’s decision will bring about a notable boost to an otherwise uncertain housing market. We’ve already seen signs that mortgage rates are falling this week, driven by a reduction in swap rates and this could well be the peak, with rates set to reduce from here on out.”