The Bank of England’s monetary policy committee have announced that they will not be cutting bank base rate in May.
Speculation on this month’s decision has been evenly split between those who forecast this decision, and those hoping for a 0.25% cut, so many borrowers will not be surprised by today’s news.
Around half of the UK’s mortgage borrowers are on fixed rates so will be unaffected by this decision, but of the remaining 50% there are still some who could improve their position despite this news.
Reportedly there are 2 million mortgage borrowers paying their lenders standard variable rate (svr) where the average is 7.11%. With lenders passing on as little at 0.05% of the 0.25% base rate cut in April, many of these borrowers will be able to find a better deal elsewhere. If you are on your lenders svr, then before deciding to move you should check to see if there are any costs to leave your existing lender. If the lender does make a charge, don’t worry, as switching to another deal can still save you money.
Looking ahead, the Bank of England will publish it’s latest inflation report next week, and this is likely to impact on whether we see base rate cut in June, as inflation rather than mortgage rates remain the Bank’s primary concern.