“I am content at the present time with holding, while accepting that risks to inflation and interest rates are on the upside, as reflected in the upward slope in the sterling yield curve, which appears to be accounted for more by risk premia than expected rates,” he said.
“I would respond promptly to any signals that an extended period of elevated energy prices could be leading to stronger possible second-round effects.”
But fellow decisionmakers Megan Greene and Huw Pill believed that a rate hike in today’s announcement would have made more sense. Both voted for an increase, with Pill arguing for “prompt but modest action” and Greene advocating a “risk management strategy” in the face of the current challenges.
Industry reaction: brokers and lenders welcome hold
The decision to hold Bank Rate steady drew a positive response from across the lending industry. Karen Rodrigues, director of sales at commercial mortgage lender and bridging specialist TAB, called it “absolutely the right call,” adding that borrowers and brokers need stability and that rate uncertainty makes building lending momentum “very difficult.” With the labour market having cooled and businesses already navigating a challenging environment, she said, “this is not the time to add further pressure.”
Joshua Elash, founding director of specialist lender MT Finance, agreed, warning that a hike “could have put further strain on both lenders and borrowers.” He pointed to the framework for a Middle East peace deal as a reason for cautious optimism, saying it should bring “some stability” to the mortgage market and ease tensions around energy costs.