The Bank of England has today decided to hold the base rate at its current level of 4.5%.
Following the latest cut in February there was optimism that further cuts would be quick to follow, therefore easing pressure on Britain’s borrowers.
However, it is clear that continuing gloomy figures on things like inflation and economic growth has forced the bank to err on the side of caution this time around. And with so much uncertainty, who can really blame them?
The challenge of wrestling with inflation goes on as the target figure of 2% is still not achieved. Indeed the January figure of 3% was quite a blow, as was the poor economic update, and demonstrates that the government is still struggling to contend with the financial issues it inherited.
The recently announced, and highly controversial, cuts in disability benefits further emphasize that there are likely to be a few more painful decisions to come.
In addition to this the increases in minimum wage and NIC contributions next month and other external factors like global uncertainty relating to things like the ongoing situation in Ukraine and Trumps Tariff policy, are going to add further pressure on attempts to keep inflation in check.
Things will be a little clearer when the Chancellor makes her spring statement next week but the predicted reductions in the base rate are now likely to be much later in the year which will keep the pressure on Britain’s borrowers and further delay any sort of recovery in an already stagnating housing market.
PLG Consultants
20th March 2025
