Base rate held at 0.25%

The Bank of England voted to hold the base rate and maintain quantitative easing at current levels.

In response to the Brexit vote the Bank cut interest rates to 0.25% and increased quantitative easing in August.

The Bank also updated its growth forecasts for the next two years, as it now expects GDP to rise by 2% this year and 1.6% in 2018, up from 1.4% and 1.5% previously expected.

Tracie Pearce, HSBC head of mortgages in the UK, said: “Today’s announcement to maintain the Base Rate at 0.25% is good news for mortgage customers.

“For those looking purchase a new home, remortgage or switch to a new deal, this announcement means that mortgage rates are expected to remain low.

“Higher than expected inflation in December is likely to flow through and impact consumer spending, and may act as a drag on demand in the house purchase market in 2017, but also potentially supply if potential movers choose to wait out the uncertainty rather than putting their homes up for sale.

“The remortgage market is however expected to remain buoyant as consumers continue to benefit from low interest rates.”

Jeremy Duncombe, director of Legal & General Mortgage Club, said: “Today’s decision to maintain the base rate at 0.25% will provide reassurance to the mortgage market.

“Continuity is exactly what our housing market needs in 2017 as the UK gears up to leave the EU by triggering Article 50.

“Borrowers who haven’t yet taken advantage of the current low rates must act now to take advantage of this opportunity to save themselves a significant sum of money by remortgaging.”

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Written by: Houseladder