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Bank of England Holds Interest Rates Steady

A man writing on a notepad next to a calculator and a mini shopping trolley
Author: Samuel Beckingham
Updated: Mar 27, 2024
3 minutes read

Last week, the Bank of England voted to keep interest rates at their current 5.25%. Despite lower-than-expected inflation announced the day previously, they have agreed that the process is working, but there’s more to be done.

Inflation Fell in February

Last month, inflation fell from 4% to 3.4%, which was the lowest level since September 2021. While this means that prices aren’t rising as quickly, it doesn’t mean that prices are on their way back down. Instead, the higher prices on the market will stay but not increase as much.

The Office for National Statistics (ONS) observed the main drivers in inflation falling were food prices and restaurant and café prices.

According to Carsten Jung, senior economist at the Institute for Public Policy Research (IPPR), predictions were way off. Global supply chains have recovered and energy costs have fallen, but domestic price pressures have fallen more quickly than the Bank of England had anticipated.

In her opinion, the raising of interest rates has been too harsh and too quick, stifling the return to much-needed growth.

Property Market

Homebuyers have been waiting for interest rates to come down, and homeowners have been anxious about soon-to-expire deals. Although it’s been widely expected that the interest rate will come down later this year, it seems as though homebuyers may have to wait even longer.

Fortunately, Governor Andrew Bailey has given signs of hope that their next meeting might offer a reduction in rates. Come June, economists are predicting a rate cut. By 2025, a hopeful estimate puts this to 3%, while a pessimistic one puts it at 3.75–4%.

Mortgages

While not directly affected by inflation, expectations in the Bank Rate impact what you end up paying for your mortgage. If inflation and the interest rate fall towards the end of the year, some price reductions will be seen. These will, however, be modest in comparison to the increases previously felt.

Lower interest rates would be beneficial for mortgage holders. Variable and tracker mortgages would instantly feel the drop, but those having to remortgage stand to gain (or lose) the most.

Get Money Back to Combat Price Rises

Mis-sold PCP

There are a number of reasons why you’d qualify for a mis-sold personal contract purchase (PCP) claim. This can include having undisclosed commissions added to your deal or receiving poor or negligent advice.

Find out if you qualify by using our eligibility checker.

Housing Disrepair

If you rent through the council or a housing association, you could get help for disrepair jobs that have been left. Being ignored by your landlord makes you feel alone, but a housing disrepair claim can force them to fix your home. As a bonus, you could receive compensation for the inconvenience.

Start your claim for housing disrepair by clicking on the button below.

Flight Delay

There’s always a chance your travel plans can go wrong. If the airline was at fault of a delay that was at least three hours long, you might be due compensation. The maximum amount you can receive for flight delay compensation per passenger is £520.

Find out if you qualify by finding your flight. Use the button below to check your eligibility.