The Bank of England's Monetary Policy Committee has voted to hold interest rates at 4.75%.
The vote was 6-3, with three members preferring to reduce Bank Rate by 0.25 percentage points, to 4.5%.
The move was widely expected following this week's higher-than-expected wage growth data and inflation figures showing that UK CPI increased from 2.3% in October to 2.6% in November.
In its latest meeting, the Committee agreed that headline CPI inflation will to continue to rise slightly in the near term, stating that "although household inflation expectations have largely normalised, some indicators have increased recently".
The MPC added that it is monitoring the impact on growth and inflationary pressures from the measures announced in the Autumn Budget, geopolitical tensions and trade policy uncertainty, which "have generated additional uncertainties around the economic outlook".
Nathan Emerson, CEO of Propertymark, comments:
“With many national and international factors continuing to shape the global economy, the Bank of England is understandably taking a cautious path until they can be confident that they are able to safely reduce interest rates back. It has been encouraging to see interest rates reduced across recent months, but the base rate can only be reduced if all factors allow.
"High interest rates can of course affect borrowing for many people, especially those stepping onto the housing ladder, but it’s important there is sensible balance to keep the overall economy secure and workable for all."
Jason Tebb, President of OnTheMarket, said:
"While a hold in rates will be disappointing for borrowers, it does suggest a level of stability which was not apparent when inflation was in double-digits and the Bank responded with consecutive rate hikes.
“This should give buyers and sellers some confidence, enabling them to plan ahead for next year when the markets expect further rate reductions. This should boost activity and transactions, which are so important to the health of the housing market and wider economy."
Matt Smith, Rightmove’s mortgage expert says:
“In a rollercoaster year for the mortgage market, we end the year with a hold in the Bank Rate at 4.75%.
“While not the early Christmas present that many would have wanted, it was widely anticipated, and must be considered against a backdrop of inflation being at the top end of forecasts, and wages have increased at a higher rate than expected.
“We don't expect any reductions in mortgage rates over the next few weeks, but as we progress into 2025, lenders are likely to look at ways to take advantage of increased demand as the busier home-buying season starts. As we move towards the end of the Stamp Duty reduction, lenders are also likely to look at reducing rates wherever possible
“Next year, three Bank Rate cuts are currently planned rather than the four anticipated just a few weeks ago, highlighting how quickly things can change in the market. We predict average mortgage rates could trickle slowly down towards around 4.0% next year, though this is dependant on the impact of a wide variety of unpredictable factors, including geo-political tensions and inflation.”