The Bank of England Base Rate has been held at 0.75%.


As was the case last December, the MPC (Monetary Policy Committee) voted seven to two to keep rates the way they are, despite strong rumours of the contrary. The report from the MPC showed that GDP growth slowed in 2019 which was attributed to the continued uncertainty surrounding Brexit as well as weak overall global growth.

Additionally, CPI (Consumer Price Index) inflation dropped 1.3% in the final month of last year and despite the general negative commentary surrounding the issue, the MPC stated that “global business confidence and other manufacturing indicators have generally picked up”, adding that “domestically, near-term uncertainties facing businesses and households have receded.”

What Does it Mean for Borrowers?

With relatively slow economic growth in the last quarter of 2019, it was certainly a close call for the Bank of England’s MPC to cut rates but what does this mean for borrowers? Naturally, the base rate is considered the Bank of England’s official borrowing rate so it influences what borrowers pay and what savers earn.

With the rate remaining steady, it is unlikely to have a substantial impact on consumers’ finances, at least not in the short term. For borrowers, the continued low-interest climate and steady increase in the number of products available, has put consumers back in the driving seat when it comes to securing a mortgage.

Indeed, now is a great time for anyone looking to purchase a property, move home or secure a lower rate to seek mortgage advice. A broker can assist borrowers in making some of the big financial decisions that surround securing a mortgage such as locking into a fixed rate or opting for a tracker product instead.

A Keep Calm & Carry on Approach

The decision to hold interest rates will hopefully complement the bounce seen in consumer confidence following the election and get the industry moving forward into 2020. It cannot be argued that we have seen a huge surge in consumers opting for fixed-rate deals for their mortgage over the last few years due to the protection that these products offer from uncertain economic conditions.

The Bank of England does tread carefully when considering interest rates and it should not be understated how important the decision to leave base rate at 0.75% is under the current circumstances. Low-interest rates work to the advantage of borrowers and we fully expect lenders to review their rates and react accordingly.

Independent Advice Still the Way Forward

Having a basic understanding of market conditions is one thing but sourcing the best mortgage terms is something else entirely. Every borrower is in a different situation with different circumstances and although now might be a great time to buy, the need for independent advice remains pivotal in the current climate.

If you are considering a purchase of your own or are simply looking to secure a lower rate, then we can help. We have access to the whole of the market and will only ever charge on successful production of a mortgage offer. To make an enquiry simply email or call 0345 873 1234. Thank you.

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Specialist Mortgage Solutions Ltd
29 Park Circus
G3 6AP
T: 0345 873 1234
F: 0141 354 7941