The Bank of England has decided to maintain interest rates at 4.5% to combat ongoing inflation amidst global economic uncertainty. Homeowners with high mortgages continue to feel the pressure as there's no immediate sign of costs easing. Experts anticipate that while future rate cuts may occur, they won’t bring substantial relief soon, encouraging homeowners to secure new remortgage deals now instead of waiting. Strong wage growth complicates the scenario, leading to predictions that any rate cuts might not materialize until May 2024, as policymakers remain cautious about inflation risk.
The Bank has held interest rates at 4.5% to tackle inflation, while global economic uncertainty means no immediate relief for homeowners with high mortgage rates.
Policymakers warn that inflation and uncertainty make further rate cuts unlikely in the near future, but a terminal rate of 3.5% is expected by 2026.
With banks factoring in future cuts, homeowners should secure new deals now rather than risk paying higher rates if their current deals end.
Wage growth remains strong, complicating the MPC's ability to lower rates, with potential cuts not expected until May.
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