Economists had expected a 7-2 split, but with three members voting in favour of an immediate rise, an increase in either August or November is looking increasingly likely.
The base rate last rose in November 2017 by a quarter of a percentage point. Many economists had anticipated that rates would rise in May, but the publication of data showing that UK economic growth had unexpectedly fallen to its slowest rate in five years meant an increase was shelved.
May’s public finance figures appear more promising, with the UK government borrowing £5 billion last month, down from £7 billion in the same month last year. Last year’s deficit, which is effectively the difference between what the government spends and what it receives in revenue from investment and taxes, has been revised down to £39.5 billion, which is £3.2 billion lower than the Office for National Statistic’s provisional estimate in April.
However, continuing uncertainty over the progress of Brexit negotiations, combined with the weak first quarter growth figures, mean there are still doubts over exactly when the Bank will raise rates.
Prepare for higher rates
Even though interest rates have been left unchanged this month, it’s important to prepare for higher rates in future.
If you’re not currently locked into a mortgage deal, it’s worth reviewing your rate to see if you could benefit from switching to a different deal. Savings from remortgaging, particularly if you’re paying your lender’s standard variable rate (SVR), can often be substantial, running into hundreds if not thousands of pounds a year.
Recent months have seen increasing numbers of homeowners lock into fixed rate deals to protect themselves from higher monthly payments in the event that interest rates do rise.
Remember that even if you are currently tied to a particular deal, you can usually secure your next mortgage deal 3-6 months ahead. That means if your deal finishes soon, you can sign up to another fixed rate in advance, so you can move directly from one deal to another.
Bank of England leaves interest rates unchanged