What the Bank’s decision to hold interest rates means for you

Isaac Stell, investment manager at Wealth Club said: “With inflation still hovering at nearly twice the Bank’s target, the case for further easing is growing harder to make.

“The BoE currently faces a dilemma, easing rates risks further fuelling inflation, but high rates strain an already weak economy. Add into the mix a government that is due to deliver a budget that needs to plug a black hole running into the tens of billions and the quandary becomes ever more complex.

“For now, the real action may lie not with the Bank, but with Westminster. The BoE remains sat on the sidelines, waiting to see what tax and spending decisions emerge in the budget. Moves prior to this could backfire and the Bank likely wants to see whether the government manages to navigate the budgetary gauntlet before making its next play.”

Ben Thompson, deputy CEO, Mortgage Advice Bureau,said: “The Bank of England's decision to hold the base rate at 4% comes as no surprise, aligning with its recent commitment to taking a gradual and cautious approach to future rate cuts. While another cut before the end of the year isn't off the table, the Monetary Policy Committee’s primary focus remains on getting inflation firmly under control.

“As always, bigger picture thinking is essential. Despite the current stability in interest rates and a wealth of innovative mortgage options, our research indicates that 27 per cent of renters still feel homeownership is a pipedream. In actual fact, taking that first step onto the property ladder may be more achievable than you think. This is where expert guidance can make all the difference: a mortgage broker can help you navigate the market with confidence, and secure a deal that aligns with your financial situation.”

Ben Mitchell, director of savings at Chetwood Bank, said: “Today’s announcement was expected, and it shows how finely balanced the economic outlook remains. We’ve got all the negatives of upward pressure on inflation without the positives of economic growth.

“Savers might have been enjoying the higher rates that have been available in the market over the last couple of years, but these aren’t guaranteed to continue into the future. With UK Savings Week starting on Monday, this is a great time to step back, take a wider look at your personal financial situation, and ask the question of whether or not your savings are working hard enough.”

Tim Parkes, CEO of RAW Capital Partners, said: “A hold was almost guaranteed today, but it will still come as a disappointment to many borrowers. With inflation flat in August and economic growth faltering, a quiet sense of uncertainty has settled over the market in recent weeks. While holding the base rate may have been the only realistic option on this occasion, the time is coming for the Bank to be bolder in both its decision making and its signposting.

“Many property buyers will be hesitant in executing their plans without greater clarity about where interest rates are headed, especially with the potentially challenging Autumn Budget on the horizon. For the past two years, we’ve been told that borrowing costs would fall, only for a few months of stubborn inflation to force the central bank back into a more cautious stance. What investors need is certainty – whether more significant rate cuts are on their way or not.

“A rate cut at next month’s meeting looks more likely, but until then onus is on lenders to provide the stability and certainty the market is crying out for.”

Paresh Raja, CEO of Market Financial Solutions, said: "At the start of the year, the commonly held view was that the Bank of England would cut the base rate four times in 2025. So far, there have been three cuts, so although there will be some frustration among homebuyers and property investors that there was not a further reduction today, it's important we see the bigger picture. A fourth cut for the year may well come when the MPC meets again on 6 November, and either way, the base rate has come down 1 per cent in the past year or so.

"We are seeing a greater sense of stability in the property and mortgage markets, with rates heading in the right direction and house prices continuing to grow at a steady pace. That said, irrespective of what interest rates do, the Autumn Budget is looming large overhead. There's so much speculation about tax changes, and particularly reforms to how property purchases (or property ownership) are taxed, that buyers and sellers alike are going to feel unsettled. We cannot wait until the Chancellor's speech on 26 November to gain clarity on this; the sooner the Government can start to communicate its planned reforms, the better for everyone."