Bank of England holds base rate at 5%: are they right on 100 Mortgages

We all knew the decision before the Bank of England did, they have decided to keep the base rate at 5% amid pressures of slower economic growth and rising inflation.

This news will come as a shock to those in the housing sector, as they were calling for a 0.25% reduction in the base rate. They wanted the cost of borrowing to go down, to try and jump start the market for first-time buyers.

Inflation hit 3.3% last month, many in the industry already knew that the interest rates would remain at 5%, but was this the right decision.

Ian McCafferty, chief economic adviser for the CBI, has said “It was of little surprise to the markets that the bank held rates unchanged this month.” He also added “The MPC needs to continue to stick to its mandate of delivering stability over the medium-term. A rate rise now would do little to influence the further rise in inflation expected in the near-term.”

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Has the Bank of England made the right decision?

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