Bank of England Meeting Thursday 26 April

What Does it Mean for my Mortgage?

The Bank of England’s Monetary Policy Committee meets on Thursday 30th April.

Don’t worry!! We’re not going to bury you in macroeconomics and start drawing Taylor Rule curves at you, but the short version is this: inflation is sticky, but the economy doesn’t want to be choked right now.

Tense..!

Here’s what the numbers actually look like, and what they mean for you.

What The Market is Expecting

The boffins whose job it is to know what the Taylor Rule says about this particular situation seem to think that the Bank of England base rate will hold at 3.75%.

The weather is getting warmer, but interest rates hold on to a winter chill and have been frozen since December.

Bailey himself has been quite explicit on the matter too, so it’s no secret and this is why all 62 economists surveyed in a recent Reuters poll expect rates to remain.

The more interesting question is what comes after. Overnight swap markets are pricing approximately 39 basis points of tightening over the next 12 months; not a cut, a potential rise. That’s the signal worth watching on Thursday, not the headline decision.

If the MPC Holds

A rather small if…

Nothing changes immediately. Tracker mortgage holders stay where they are. Fixed rate holders are insulated by their deal. If you’re looking to buy, the rate environment you’ve been planning around remains in place.

A hold is not bad news. It’s the market pricing certainty.

If the MPC Surprises With A Cut

And it appears to be a big if – tracker mortgages linked to base rate will move; most lenders typically pass cuts within a month or two.

Oh, and some guy said they’ll eat their hat?

Coming off A Fixed Rate?

If your deal expires in the next three to six months, you could lock in a rate now. If rates fall after Thursday, lenders may allow a switch before completion. Acting early removes uncertainty.

Looking to Buy a Home?

Rates remaining where they are means it’s easier to get a sense of what you’ll be expecting to pay.

Our mortgage calculators can help you work out affordability, stamp duty, and repayments.

Know Your Budget Already?

We can help in securing your Agreement in Principle today.

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