The Bank of England have made the decision to leave the base rate frozen at 4.5%.

• Following a drop in February 2025, the rate has been maintained at 4.5%.
• This comes as a result of inflation (CPI) increasing to 3.0% in January 2025, and sitting higher than the Bank of England target rate of 2.0%.
• The decision to hold the base rate by the Monetary Policy Committee was the result of eight members voting to hold at 4.5%, with just one member voting for a cut to 4.25%.

Thomas Cantor, Co-Head of Short-Term Finance at West One Loans, commented:

“It is no surprise that the Bank of England has decided to hold rates given that inflation continues to prove more persistent than thought with CPI measuring 3% in January 2025 and the latest figures from the Office for National Statistics also showing that growth in earnings has held firm.

The Bank of England is also forecasting inflation to continue to rise to 3.7% this year. With these levels clearly being higher than the target of 2%, largely driven by energy prices, I think their decision was really made for them today.”

Robert Sadler, Vice President of Real Estate at Excellion Capital, comments:

“Today’s hold was to be expected given the fact that inflation increased to 3% in January — well above the expected 2.8% —  and so a second consecutive cut to the base rate would’ve been a shock.

While property investors and financiers would’ve liked to see a cut, which would have definitely inspired a boost in industry activity, on balance the sector can afford to wait until May for this to happen. Recent history has shown us that cutting rates too low too soon can lead to harmful inflation, which is the cause of the current higher rate environment.

Therefore, the Bank’s prudent approach here today is a sensible one.”

Stephanie Daley, Director of Partnerships at mortgage advisor Alexander Hall, commented:

“The nation’s homebuyers will be understandably disappointed that interest rates have remained frozen at 4.5% today, however, the landscape has improved dramatically in recent months and we have seen mortgage pricing track downwards since the start of the year.

Both those looking to purchase, as well as those coming to the end of a fixed-term, will find themselves far better off today versus even this time last year and we expect the picture to continue to improve as a hold on the base rate brings ongoing stability to the market.”

CEO of specialist lender Octane Capital, Jonathan Samuels, commented:

“No news is still good news for the nation’s borrowers and whilst they will have been hoping for a second cut this year following the reduction seen in February, it’s probably a case of wishful thinking given that inflation has reared its head again in recent months.

A hold on the base rate will, at least, ensure that market stability continues to build over the coming months as buyers continue to act with the reassurance that mortgage rates are unlikely to climb.”