As had been widely expected by market analysts, the Bank of England has kept UK interest rates on hold. The announcement was made following the latest MPC meeting and hard on the heels of UK inflation data yesterday showing CPI at 3.4% over the past year – still way higher than the Bank’s 2% target.
With further concerns of inflationary pressures in the weeks and months ahead, today’s news will come as a disappointment to mortgage and property professionals hoping for some stimulus for the market – as well as for mortgage holders and those looking to buy a property.
Sharing their reaction to today’s interest rate decision, Mortgage and Property experts have commented as follows:
Matt Thompson, head of sales at estate agency Chestertons, says: “Some buyers paused their property search in the hope for another interest rate cut and a more varied selection of mortgage products but higher-than-expected inflation has diminished those odds for the time being. We have recently seen some lenders increase the cost of their fixed-rate deals but there are still sub-4% options available which will encourage some house hunters to resume their search over the coming weeks.”
Alpa Bhakta, CEO of Butterfield Mortgages Limited, said: “Investors will certainly have hoped for a rate cut today, but persistent inflation and other economic indicators have made the Bank of England’s job increasingly complex. As such, a rate hold had become increasingly likely in recent weeks. It has been a common theme of the past two years, with the base rate falling at a slower-than-expected pace.
“Even if UK inflation runs above the 2% target, there remains a real possibility that we’ll see the base fall later this year – the question is how many cuts, and when will they come. For now, the lending sector must respond to today’s decision by doubling down on support for both brokers and investors.”
Paresh Raja, CEO of Market Financial Solutions, said: “When it cut the base rate in early May, the MPC strongly indicated that further cuts would follow. But economic and political landscape, both in the UK and globally, continues to evolve at pace – pronounced turbulence and uncertainty made a hold today almost inevitable.
“But we should see the bigger picture: the base rate is 0.75% lower than it was ten months ago, and a gradual decrease is still expected in the coming year. The challenge right now is to ensure inertia doesn’t set in within the property market while would-be buyers wait for further cuts; we have to unlock buyer demand right now.
“Lenders cannot afford to dwell on decisions from Threadneedle Street, and should focus on what they can control. With the prospect of multiple rate cuts in the second half of this year now fading, it’s vital that lenders continue to adapt their products and offerings in line with borrowers’ needs. If they can do that, investors should have the confidence to execute their plans, helping to unlock activity across the market despite the higher-rate environment.”
Tony Hall, Head of Business Development at Saffron for Intermediaries, comments on the BoE interest rate decision:
“Today’s decision to maintain the base rate is certainly not a surprise. Recent commentary from policymakers pointed to caution around acting too soon, particularly with inflation still hovering above target. Broader economic shifts, including the Chancellor’s spending review, may also have supported a more measured stance. These domestic and global factors have led many lenders to adjust their mortgage pricing, with some products still available below 4% while others have edged slightly higher.
“Even so, there are still plenty of reasons for buyers to feel optimistic. The summer months typically bring increased market activity, and the government’s multi-billion pound pledge for affordable housing signals a commitment to addressing long-term supply. As we move into the second half of the year, the combination of seasonal momentum and a competitive lending environment offers encouraging signs for those looking to buy.”
Matt Smith, Rightmove’s mortgages expert said: “Home-movers will have to wait a little longer for a third Bank Rate cut of the year, but today’s hold was widely anticipated. Despite the global uncertainty and turbulent events that we’ve had so far this year, the mortgage market has remained fairly stable. We’re broadly where the markets expected us to be at the start of the year in terms of inflation and rate cuts.
“Lenders have a bit of room to reduce rates further even with a hold in the Bank Rate today so home-movers can still be hopeful of some small mortgage rate cuts over the next couple of weeks. Average rates have been pretty flat in recent weeks, but we have seen increasing signs of competition amongst lenders as they have reduced their stress-testing criteria and with new mortgage products coming back to market, lenders are looking at ways to support more people get the home that they want.”
Paul Noble, CEO of Chetwood Bank, said: “A hold today is the cautious choice, but leadership means more than playing it safe. The MPC’s decision will be welcomed by some, but it’s another example of cautious drift over clear direction. Holding their ground may make sense given chaotic global pressures, but it’s not the decisive leadership our economy needs.
“The economy has been through the ringer, with the Chancellor’s plan providing domestic pressures to add to those caused by the US, Russia, and beyond. However, the central bank continues to act as though inflation is the only variable that matters.
“The MPC’s lack of action piles on greater uncertainty for mortgages as well, leaving would-be buyers in the lurch. This cautious approach could lead to greater paralysis when what markets need is a catalyst. For savers, the risk is time – it’s vital to find to best returns, to stay flexible, and to stop letting handwringing on Threadneedle Street dictate their outcome.”
Following today’s Base Rate announcement by the Bank of England, Alan Davison, Chief Commercial Officer of Afin Bank, commented:
“It’ll be interesting to read the minutes from today’s MPC meeting, because while a Base Rate hold was widely expected, there are a lot of factors that would suggest a cut is needed, so it’ll be fascinating to see what kind of split there was between members.
“At home inflation remains stubbornly high, while internationally the risk of war in the Middle East is adding to global pressures already stoked by the war in Ukraine and US tariffs, damaging confidence.
“Significantly, economists and commentators are also split on how quickly and how deeply the Bank of England will cut the Base Rate, with some predicting another three cuts by the end of the year.”
John Phillips, CEO of Just Mortgages and Spicerhaart, said: “The decision to hold interest rates is not unexpected and is certainly in line with the bank’s careful and gradual approach. Yesterday’s news on inflation wouldn’t have been enough to sway them, especially with current geopolitical tensions and in light of further escalation in the Middle East and the potential ramifications this could have on prices and global trade.
“While the changing narrative around interest rate expectations and the number of cuts isn’t entirely helpful and goes some way to unsettle borrowers, we can take comfort that the consensus is still that interest rates will be cut. While careful and gradual is fine to a point – especially given the bigger picture at play – an economy on life support requires some clear action and hopefully that will mean more than one cut later in the year. It will improve affordability, drive homeownership and deliver economic growth.
“In the meantime, the message to potential borrowers is that right now, lenders are willing to lend, options are available to support all buyers and brokers stand ready to help them navigate the market. We’ve been encouraged by demand across both EA and financial services businesses, but know there are still plenty with the appetite to buy, but just need that extra support.”
Frances Haque, Chief Economist, Santander UK comments: “As expected, base rate has been held at 4.25%. Despite the anticipated hold, we have seen many lenders cutting mortgage lending rates in the last week – Santander included. Our forecasts suggest that we’re still likely to see two more base rate cuts over the coming year – most likely ending 2025 at 3.75% – with this being “priced in” to current mortgage rates.
“Aspiring homeowners and those already on the ladder could expect to see mortgage rates continue to hover between the top end of the threes or lower end of the fours. For this to change significantly we’d need to see changes in economic data – and as ever, that could see mortgage rates go up as well as down.
“We saw strong growth in Q1 followed by April’s GDP data showing a fall of 0.3% month-on-month. As has been the trend for the last few years, risks to the outlook remain there is the potential for rising oil prices on the back of the crisis in the Middle East and increased market volatility. Further loosening in the labour market with unemployment increasing to 4.6% and wage growth falling a little more than expected has also been seen, but wage growth is still significantly above rates compatible with a 2% inflation target.
“While these may pose bumps in the road for buyers, the traditional increase in home moving we see during the summer will likely continue to drive demand for properties as we enter Q3 which, coupled with affordability improvements, means we expect the 2025 mortgage market will continue to grow.”
Simon Webb, managing director of capital markets and finance at LiveMore, comments:
“The Bank’s decision to hold interest rates today is a sensible move considering current inflation levels and ongoing geopolitical uncertainty. While borrowers may be eager to see further cuts, today’s hold helps to reinforce market stability and gives lenders and intermediaries the space to plan with greater confidence.
“For the later life lending market, this consistency is welcome. After a period of significant economic volatility, a steady rate environment allows brokers to have more informed conversations with clients about their long-term financial plans.
“We remain optimistic about the outlook for later life lending. With demand growing and awareness increasing, there are real opportunities to support older borrowers with tailored, flexible solutions — particularly as the market prepares for the potential of further rate cuts later in the year.”
Sharon Beedham, Relationship Director at ONP Solicitors commented:
“With inflation flat and geopolitical noise fuelling rate-cut rumours, it’s telling that the Bank chose caution over reaction. That speaks to how fragile the economic balance remains — but it also underlines that the recovery is on firmer ground. In the current climate, a steady hand from the Bank of England offers more value than a rushed rate cut.
“What’s especially encouraging is the spike in first-time buyer activity despite the end of stamp duty incentives. That shows that real demand is still there — not just stimulus-driven. For many, consistency is more empowering than volatility. A held rate, while not headline-grabbing, gives movers a window to act with more certainty and less fear of shifting sands beneath them. And just as importantly it provides the industry with the space to plan, scale, and improve service without being blindsided by policy volatility.”
Reacting to the Bank of England’s base rate decision, Colin Bell, Founder and COO of Perenna said:
“Steady ahead from the MPC. While some may have hoped for a cut to stimulate the economy, the Bank of England has decided to take a more cautious approach. Inflation remains stickier than anticipated and, while economic growth is a top priority, it’s hard to prioritise while consumers contend with rising prices.
That said, lenders are closely watching, and some have been slowly reducing their rates. Many lenders have already priced in further reductions down the line; this may temper their views. For most consumers, however, high house prices are the core driver of our affordability crisis, not marginal changes in the interest rate. Even a full base point cut wouldn’t reignite the market for those barely scraping together a deposit.
The mortgage industry is constantly rolling out new innovative products to help navigate this problem, and the FCA has clearly signalled that it’s open to new ideas – but we need to move quicker. We need the legislative infrastructure in place to facilitate improvements in homeowners’ accessibility, and real reform on affordability rules with a market free to deploy new and creative solutions.”
Ben Thompson, Deputy CEO, Mortgage Advice Bureau:
“The Bank of England was always going to play it safe this time around, with the decision to hold the base rate at 4.25% widely expected.
“There are still plenty of positives to be taken from this, especially for those who think their financial situation may set them back from getting a mortgage. From 100% lending options now available, to mortgages that stretch your borrowing power, there are so many ways to get on the ladder – regardless of the size of your income or deposit.
“It’s also good to look at how far we’ve come, with the current base rate being the lowest we’ve experienced since May 2023. We can still anticipate cuts later in the year, although how soon these will arrive remains to be seen. As always, speaking to a broker should be your first port of call. Their expertise is invaluable in helping you get mortgage ready and navigate current market conditions with ease.”
Matt Harrison, commercial director at Finova Broker, commented:
“While today’s hold may feel underwhelming to borrowers hoping for immediate relief, for brokers, it marks a useful moment of clarity. When rates stay flat, brokers can shift out of reactive mode and into strategic guidance — helping clients plan with more confidence, rather than second-guess the next move.
“That said, this isn’t a return to calm — it’s a holding pattern in a high-stakes environment. Lenders remain cautious, product windows are tight, and clients are still navigating affordability thresholds. The brokers who’ll thrive in this landscape are the ones who can adapt fast: spotting opportunities in niche products, helping clients remortgage at the right time, and translating macro data into personal impact.
“We’re focused on giving brokers that edge — whether it’s through smarter sourcing tools, real-time affordability tracking, or better CRM insights. A flat rate doesn’t mean a flat market — and the right tech can turn stability into momentum.”
Commenting on the Bank of England interest rate decision to hold, Joe Pepper, UK Chief Executive Office at PEXA, said:
“There will be no raised eyebrows by the Bank of England’s decision to keep the base rate at 4.25%. Inflation staying at 3.4% and defying expectations of a slight drop, combined with geopolitical turmoil and higher than anticipated labour costs will have undoubtedly led the monetary committee to remain cautious in their approach.
“The implications for the mortgage market, however, will still be disappointing for borrowers and particularly the 1.8 million fixed-rate holders due to remortgage this year. Those hoping for more favourable mortgage rates are once again confronted with uncertainty and exposure to fluctuating inflationary pressures. When rates eventually fall – and they will – there will be a scramble from borrowers to secure better deals.
“Conveyancers are already stretched, and a sudden surge in transactions could overwhelm the system. Now is the time to ensure we have the right infrastructure and technology in place to deal with this demand and ensure positive outcomes for all in the remortgage process.”
Kevin Roberts, Managing Director of L&G’s Mortgage Services business comments on the Bank of England Base rate decision
“I don’t think too many people will be surprised at the base rate holding at 4.25%, but there’s still plenty of positives in the market. We’re seeing more sub-4% deals on offer, along with some innovative products, with higher LTVs and low, or no deposits. As we move into the peak summer season, now’s a good time to consult with a professional mortgage adviser to make the most of what the current market has to offer.”
Commenting on a hold in interest rates providing some reassurances, Daniel Austin, CEO and co-founder at ASK Partners, said: “Today’s decision to hold interest rates, following unchanged inflation data, offers some reassurance after recent market volatility. However, with global uncertainty, driven by trade tensions and domestic tax shifts, still casting a shadow, the question now is how long the Bank of England can maintain this pause.
“For homeowners and buyers, the hope of lower borrowing costs remains alive. But persistently high fixed mortgage rates continue to delay meaningful relief. While house prices have largely flatlined since the end of the stamp duty holiday, any Trump-related volatility that pushes down swap rates could improve affordability and rekindle momentum.
“Investors and developers are watching closely. Demand remains strong in resilient sectors like co-living and build-to-rent, where supply-demand imbalances keep capital flowing. A clear, downward path for rates would help unlock further activity – but with uncertainty still high, staying agile is essential.”
Richard Pike, chief sales and marketing officer at Phoebus Software says:
“Today’s decision by the Bank of England to hold interest rates at 4.25% is not unexpected given the persistent inflationary pressures and broader economic uncertainty both globally and here in the UK. While some had hoped for a continued trajectory of rate cuts following May’s reduction, it’s widely expected they will come later in the year. The MPC is clearly taking a cautious approach in light of stubbornly high inflation, particularly in essential areas like food, and ongoing global tensions impacting commodity prices.
“For the mortgage market, a pause in rate cuts may not move the dial significantly in the short term. Fixed mortgage rates have already stabilised in recent weeks, and today’s hold is likely to reinforce that pattern. However, for lenders and borrowers alike, the prospect of rate cuts being delayed further underlines the importance of planning for a higher-for-longer interest rate environment.
“The market has adapted remarkably well over the past year, and technology will continue to play a key role in helping lenders maintain efficiency and flexibility. While today’s decision may temper expectations, it also reinforces the need for robust systems that can support brokers and borrowers through uncertain times.”
Nick Leeming, Chairman of Jackson-Stops comments: “Holding rates today reflects the air of uncertainty that has entered the UK economy. A combination of geopolitical tensions, as well as continuing inflationary pressures at home, has resulted in any rate reductions being deferred until later in the year.
“The economy, while not in unchartered territory, is having to adjust in real time to manage inflation and reassure consumers. For the property market, today’s decision to hold rates will not immediately effect mortgage rates on the market but it may cause slight hesitancy to enter into the buying process.
“Committed buyers will not be knocked off course by the Bank of England’s actions today, the market remains in a robust position with completions able to take place. Further proof of the market’s resilience is being seen across the Jackson-Stops network with a notable uptick in new listings in May compared to two years ago. High volumes of buyers and sellers are willing to press on and take their next step irrespective of wider economic headwinds.”
Stonebridge Chief Executive Rob Clifford comments on this afternoon’s base rate decision:
“By holding rates today, the Bank of England is exercising caution amid mounting risks — particularly as renewed Middle East tensions threaten to push energy prices, and therefore inflation, sharply higher once again.
“This decision sends a clear message that the Bank remains firmly focused on reining in inflation despite signs of a weakening UK economy. But we see this pause as temporary.
“Though inflation risks are rising, the Bank appears confident the recent uptick is temporary and will ease in the months ahead.
“For that reason, we continue to expect two rate cuts this year – likely in August and November – potentially pushing the base rate below 4% for the first time since early 2023.
“Borrowers may have to wait a little longer to see if this translates into lower mortgage rates, although we think that outcome is very likely.
“With the outlook shifting daily, brokers need to be proactive in contacting their customers. The market is confusing, and many borrowers will be seeking clarity and reassurance. Expert advice will be vital in helping them make informed decisions in confidence.”
