Bank of England holds base rate at 0.1%

Good news for the property industry and buyers as the Bank of England holds the base rate at 0.1%

Following a unanimous vote from its Monetary Policy Committee, The Bank of England has held the base rate at 0.1%.

This was despite the CPI (Consumer Price Index) inflation rising to 2.1% in May 2021, which was above the Bank’s 2% target.

The Bank of England is expecting inflation to reach 3% by the end of this year, before falling back in 2022.

Raising interest rates can be a method of curbing the rise of inflation.

The Chief UK Economist at the Monetary Policy Committee – Paul Dales, said: “Other than the Monetary Policy Committee (MPC) noting the growing upside risks to inflation alongside today’s policy decision, there were no real signs that it is thinking about tightening policy sooner.

“We think policy will be tightened much later than the mid-2022 date the markets have assumed.”

The Bank of England revised upwards its forecast for GDP growth in the second quarter from 4¼% to 5½%, as the economic restrictions caused by the Covid lockdowns are beginning to ease.

The Bank of England base rate has a major effect on both mortgage interest rates and the returns you can get from savings.

The base rate of 0.1% is therefore, good news all round for the property industry and particularly encouraging for those looking to buy who can take advantage of the low mortgage interest rates.