Is today's BoE BBR decision the definition of insanity? Rob Clifford, Stonebridge

22 June 2023

Bank of England Base Rate comment from Rob Clifford, Chief Executive of Stonebridge, the mortgage and protection network:

“It is a case of déjà vu with today’s decision to increase Bank Base Rate by 50 bps. As soon as yesterday’s inflation figures revealed the same overall figure as last month and an increase once again in core inflation, this MPC decision was nailed on. The big question however is whether this is an example of the definition of insanity – doing the same thing over and over again and expecting a different result.

“Multiple rate increases over the last year have barely moved the dial on inflation, and what we have is a decision which will only add to the monthly mortgage payment burden for many borrowers, at a time when the cost of living remains extremely high. One senses that both the Government and the Bank have painted themselves into a corner from which they have few options to extricate themselves.

“The reality is that high inflation is likely to be with us for many months to come, and if the Bank feels it only has one option at its disposal – even if it isn’t working – then the likelihood is that this will not be the last rate rise of the year. We expect a rise in August and possibly September too. Consumers now need mortgage advice more than ever before.”