BBR decision comment - Stonebridge

09 May 2024

Below is a comment on today’s MPC Bank Base Rate decision from Rob Clifford, Chief Executive of mortgage and protection network, Stonebridge:

“With swaps increasing in recent weeks, the recent decision by the US Federal Reserve to hold its rate amidst concern about its inflation not coming down, and the next set of ONS inflation figures not due to be published for another couple of weeks, it was highly unlikely the Bank would announce any kind of rate cut, and so has been the case. We have also seen the mood shift with regards to the timetable for a cut to Bank Base Rate, with suggestions that we may now be waiting until the autumn before the Bank feels empowered to act.

“Where once it appeared somewhat nailed-on that the Bank would act in June, that sentiment has shifted, and therefore mortgage pricing is not likely to benefit from any reduction in the base rate possibly until September and November. With several large mainstream lenders moving their mortgage pricing upwards to replicate the move in swaps, this is likely to be the position, at least in the short term and certainly up until the next MPC meeting in June. While we wait for next month's meeting, advisers should continue to inform borrowers that the best time to act is now, as it never pays to base personal mortgage decisions on what might or might not happen in the future; they can of course only advise on what is available in the present.”