Bank of England Holds Interest Rates Despite Declining Inflation
The Bank of England's decision to maintain the current interest rate at 5.25% has been met with mixed reactions, given the backdrop of falling inflation. In February, inflation dipped to 3.4%, a decrease from the previous month's 4%, marking its lowest level since September 2021 when it stood at 3.1%.
The announcement, which preceded the Bank's latest interest rate decision, revealed that the Monetary Policy Committee voted 8-1 in favour of keeping interest rates unchanged. However, one member advocated for a reduction to 5%. This decision contrasts with the previous decision in early February when a 6-3 majority also opted to hold rates steady.
Bank of England Governor Andrew Bailey emphasised that it is not yet the time to cut interest rates, citing "further encouraging signs" of declining inflation. He reiterated the importance of ensuring that inflation returns to the 2% target and remains stable before considering any adjustments, stating, "We're not yet at the point where we can cut interest rates, but things are moving in the right direction."
While the decision to maintain interest rates may be viewed positively by property professionals, homebuyers were hoping for a decrease. Despite the stability in rates prompting increased buyer activity, there is still a sentiment among buyers that rates are too high resulting in a more cautious approach from buyers. At Lyss Homes, we are seeing buyers negotiate more aggressively, and properties that are priced competitively are more likely to sell than those marketed at a higher price range.
Overall, the decision by the Bank of England to hold interest rates reflects a cautious approach aimed at balancing economic stability with the need to address inflationary pressures.
Want to sell or let your property ?
We are estate agents and letting agents in Leytonstone, E11 and we are specialists in the East London property market. Request a free valuation and one of our experts will get in touch with you to discuss how we can help you.
GET A FREE INSTANT ONLINE VALUATION