Base rate kept at 5.25% as NatWest lowers some fixed rate mortgages
Bank of England governor Andrew Bailey has said rate cuts are “on the way” hours after its rate-setting body held the base rate at 5.25%, giving no hint on when it would begin to fall.
The Bank of England’s Monetary Policy Committee voted by a majority of 8–1 to maintain Bank Rate at 5.25%. One member preferred to reduce Bank Rate by 0.25 percentage points, to 5%.
NatWest was one of the first major lenders to lower its rates for a while, reversing some of the fixed-rate price hikes we have seen recently. NatWest decreased its property purchase rates by up to 0.07% and its remortgage rates by up to 0.24%.
Aaron Strutt, product director at Trinity Financial, says: “Andrew Bailey has constantly said the base rate won’t come down until inflation is under control.
“If the base rate comes down, it is reasonable to expect the long-term mortgage funding costs to reduce, which means fixed rates may come down again. The issue is we don’t really know what it is going to pricing. More borrowers are taking two-year fixes rather than five-year deals as they expect rates to be cheaper over the next few years.”
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The information contained within was correct at the time of publication but is subject to change.
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