The Bank of England has announced that the base rate will remain at 4%.
Here’s a closer look at what influenced the decision — and what it could mean for your mortgage and the local property market.
Why the rate was held
This was one of the most closely watched decisions of the year, with experts split on whether the Bank would hold or cut the rate.
The decision ultimately came down to two conflicting factors: inflation and economic growth.
Inflation, at 3.8%, remains nearly double the Bank’s 2% target. Normally, that might trigger an increase to cool things down. But with sluggish economic growth (just 0.3% last quarter) and unemployment rising to 4.8% — the highest since the pandemic — there was little appetite for tightening further.
Instead, the Bank opted to hold steady and wait for clearer signs of stability.
What it means for your mortgage
Lenders take Bank Rate into account, but it’s not the only factor influencing mortgage costs. They also look at swap rates — essentially what banks charge each other — and government bond prices.
If you’re on a fixed-rate mortgage, your payments won’t change until your current deal ends.
If you’re on a tracker mortgage, which follows the Bank Rate, your monthly payments will stay the same for now.
And if you’re on a standard variable rate, your lender may hold steady — though they’re not obliged to follow the Bank’s lead.
For first-time buyers or anyone looking to remortgage, this could be positive news. Competition among lenders has already brought average mortgage rates below 5% — the lowest level since late 2022 — and more cuts could follow if the market expects a rate drop soon.
(Note: This article is not financial advice. For individual guidance, speak to a qualified mortgage adviser.)
What happens next?
While today’s decision may feel like a pause, most analysts believe the next move will be downwards.
Goldman Sachs and other forecasters expect the Bank Rate to fall to 3.75% by year’s end, with further reductions likely in 2026.
However, November’s upcoming Budget could complicate things. Expected tax rises may slow the economy and reduce inflation, influencing when the next cut happens.
What it means for the property market
Even without a rate cut, the direction of travel is clear: borrowing costs are easing, and confidence is returning.
That’s good news for buyers and sellers alike. More predictable mortgage rates make it easier to plan, price accurately, and move forward with confidence.
If you’re considering a move in 2025, now’s the time to talk strategy and position yourself ahead of the market.
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Article by Andrew Overman | Partner | Location Location East
