Union slams Bank decision as "workers face high rents"

A trades union has slammed the Bank of England over its decision to keep base rate at 5.25 per cent, saying the failure to cut the rate is a slap in the face for workers facing his rents and mortgages.

Unite the union’s general secretary, Sharon Graham, says: “The Bank of England’s failure to reduce interest rates is unduly prolonging the misery for everyday people while banks continue to profit, for doing nothing. Why do workers and their families have to wait for jam tomorrow while fat cat city bankers, can look forward to ever bigger bonuses purely because of continued high interest rates?

“Throughout the cost-of-living crisis, the Bank of England has made the wrong call. Firstly, blaming workers seeking a desperately needed pay increase, not profiteering and price gouging companies, for rising inflation. Now it is failing to help workers struggling to keep a roof over their heads in the face of dramatically higher rents and mortgages.”

The Bank of England ’s monetary policy committee was split yesterday - two wanted a rise, six wanted the rate held steady, and one argued for a cut. It was the first time since March 2020 that a member voted for lower rates, and the first time since March 2008 that the committee was split three ways over whether to raise, lower or hold.

Propertymark chief executive Nathan Emerson responded to the decision by saying: “It is positive to see that many people intending to buy their first home or sell their current one won’t be hindered by an increase in interest rates.  

“However, it is now time for the UK Government to continue to curb inflation so that interest rates can fall further to help ease the backlash this has had on people’s affordability. They should make 2024 the year consumers start to enjoy some confidence again following three years of disruption to the economy.”  

Matt Smith, Rightmove’s mortgage market commentator, adds: “As painful as rate rises have been for many people, there are increasing signs that Base Rate rises are having a real impact on the economy, and inflation is heading in the right direction. Another hold in the Base Rate today also shows that the Bank will also be cautious not to overshoot Base Rate rises, and will be keen to maintain the current stability.

“The market appears more robust than last year, evidenced by the fact that the surprise uptick in inflation a couple of weeks ago didn’t derail the downward trend of mortgage rates. The big picture remains the same – the Base Rate is unlikely to rise further, and mortgage rates have some room to come down further before settling.

“It’s been a promising start to the year for housing market activity, with more people than this time last year listing their home for sale, looking to buy, or getting a Mortgage in Principle to see what they can afford. For anyone thinking of moving but still holding back from taking action, the slight uptick in average rates in some lower Loan-To-Value brackets this week is a reminder that average rates won’t fall forever and mortgage rates appear to be settling after significant drops at the start of January.”