The Bank of England has kept base interest rate at 5.25%.

Some industry figures hoped for a cut following yesterday’s inflation news, in which the headline Consumer Price Index measure of rising prices showed a fall to the target 2.0%.

However, most financial analysts anticipated ‘no change’ by the bank’s monetary policy committee, which met today. 

Commenting on the decision, Kevin Shaw of the Leaders Romans Group of lettings agencies says: “The Bank of England’s decision to hold interest rates at 5.25% is no surprise given the proximity to the general election: had the Bank lowered rates for the first time in 11 months just two weeks before the polls, the decision may have been interpreted as politicking.

“But a drop of at least 0.25% in August seems an inevitability given yesterday’s further drop in inflation and the inclination of some Committee members to reduce the rate previously. It was in August last year that interest rates reached their recent high (the highest since February 2008) and the property industry, including the millions of consumers impacted, would welcome a long-awaited reduction.

“The housing market has seen cumulative growth throughout 2024 but affordability remains an issue for some, specifically first time buyers. An interest rate drop would consolidate the renewed confidence in the market and enable people to make the move that they may have been postponing for the last year.”

Former RICS residential chairman Jeremy Leaf adds: “Although a cut to base rate would give some added impetus to the housing market following the uncertainty which the election announcement inevitably brought, no change was expected. Inflation is thankfully falling but it is early days as pressures remain in wage growth and the services sector in particular. 

“Hopefully, lenders will sense that a drop in base rate is coming sooner rather than later and begin reducing their mortgage rates, however marginally, in anticipation which will certainly improve confidence.”

And Nicholas Mendes of independent mortgage broker John Charcol comments: “Leading up to this monetary policy committee meeting, market predictions indicated a 50% chance of an initial rate cut to 5% by August, however June’s inflation print, and wage growth data will be key to that assumption with a potential total decrease of 0.5% by the end of the year.

“While today’s decision to hold rates steady may be difficult to accept, recent lender movements suggest we are approaching the end of the era of higher-priced fixed rates. Borrowers though will need to remain patient a bit longer before we start to see high street lenders battling amongst themselves at sub-4% fixes.”

The chief executive of Propertymark, Nathan Emerson, comments: “For the housing market it is vital there is further confidence regarding the long-term trajectory of inflation, and this is a stance the Bank of England has remained very open about before any commitment is made to start reducing the base rate. Propertymark remain keen to see rates reduced when circumstances allow and for this to then translate into competitive mortgage deals from lenders at the first opportunity. We have seen a much-needed progress since the start of the year regarding the housing market and it is vital that stability is maintained.”