The Bank of England has held interest rates at 3.75%, as uncertainty continues to dominate both the UK and global economies following the ongoing conflict in the Middle East. Analysts widely predicted the benchmark rate would remain unchanged, with the Bank signalling it needs time to assess the full impact of the Iran war on the economy and the cost of living. The rate of inflation currently sits at 3.3%, still above the Bank’s 2% target.
For homeowners coming to the end of a fixed deal, the picture has become more complicated. The average two-year fixed mortgage rate stood at 4.83% before the conflict began, climbed to a peak of 5.90%, and now sits at 5.81% according to Moneyfacts. The advice from brokers is clear: secure a rate that suits your circumstances as soon as you can.
Commentators remain divided on what comes next. Some believe rate rises are still on the table later this year, while others expect no further change. The MPC has now published its first full set of economic forecasts since the conflict began in late February, with inflation expected to be revised upward and growth projections revised down.
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Source: BBC