The Bank of England has kept interest rates unchanged at 5%, following last month’s reduction from a 16-year-high of 5.25%. This decision was largely anticipated after core inflation surged to 3.6% in August, despite headline inflation remaining steady at 2.2%.
The BoE's cautious approach highlights its concern over persistent inflation pressures and signals that the central bank expects inflation to rise again toward the end of the year.
Industry Reactions
Malcolm Prescott, Managing Director of Webbers Property Services, remarked, "This decision is no real surprise. Many colleagues and industry commentators had expected rates to be held, given inflation remains at just over 2%. With the recent launch of sub-4% fixed-rate mortgage products, we foresee a gradual reduction in interest rates over the next 12 months, which will build confidence and enable more robust long-term financial planning."
He also expressed hopes for the upcoming Autumn budget, stating, "We do hope the government considers measures to help first-time buyers and recognises the importance of retaining investor confidence in the local rental markets."
Propertymark’s Perspective
Nathan Emerson, CEO of Propertymark, noted, "Since the initial rate cut a few months ago, many have been closely watching for further reductions. However, it is crucial that the Bank of England proceeds with caution to avoid reversing economic progress."
Emerson emphasised the need for consistency and a strategic approach to future rate cuts, saying, "Propertymark is keen to see long-term stability, confidence, and affordability within the economy."
This decision will continue to be closely watched as inflationary pressures persist and the market awaits further guidance from both the BoE and the government
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