The Bank of England voted unanimously to keep the base rate at 0.75% in November, the third consecutive month it has left rates unchanged.
Inflation, or the cost of living fell by more than expected in September and wages have risen at their fastest pace in almost a decade, easing pressure on the Bank to raise rates.
Although many commentators predict that a no-deal Brexit would mean rates stay lower for longer, it is possible that rates may rise even if the UK has a disorderly departure from the EU next March. The Bank forecasts that rates could increase to 1.5% over the next three years.
An uncertain future
Rates fell following the EU referendum vote in 2016, but the Governor of the Bank of England Mark Carney warned that rates could move either way in the event no Brexit deal is reached.
“Since the nature of EU withdrawal is not known at present, and its impact on the balance of demand, supply and the exchange rate cannot be determined in advance, the monetary policy response will not be automatic and could be in either direction,” he said.
What it means for your mortgage
The Bank’s decision to hold rates means that borrowers with variable rate mortgages which track the base rate won’t see any change in their mortgage payments.
However, with speculation growing that we could see rates rise soon, if you’re on a variable rate mortgage it makes sense to consider how you might cope with higher payments.
If you’re not locked into your current deal, it may be worth considering locking into a fixed rate deal if you want peace of mind that your mortgage payments won’t change even if rates do go up.
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