On Thursday the 11th of May, the Bank of England will reveal its latest interest rate decision. Industry experts and professionals alike, have shared their views and opinions on the upcoming announcements and predictions. These can be viewed below:
Samual Mather-Holgate, Independent Financial Advisor at Mather and Murray Financial, states “The central bank shouldn’t raise rates because it’s an ineffective strategy to control inflation on essential items. It’s failed for the past year and will continue to fail. Inflation will drop when price increases are baked in for the year. That said, the Bank of England will raise rates because it is wed to the idea that doing something with rates shows it as less impotent. The whole set-up is a shambles and Andrew Bailey should resign.”
Amit Patel, Adviser at Trinity Finance, states “The central bank shouldn’t raise rates because it’s an ineffective strategy to control inflation on essential items. It’s failed for the past year and will continue to fail. Inflation will drop when price increases are baked in for the year. That said, the Bank of England will raise rates because it is wed to the idea that doing something with rates shows it as less impotent. The whole set-up is a shambles and Andrew Bailey should resign.”
Riz Malik, Director at R3 Mortgages, states “While increasing interest rates may be a viable strategy to combat inflation, it is crucial to consider the wider implications of such actions. The repercussions of countless interest rate hikes have become painfully evident as the UK teeters on the brink of economic stagnation. It is high time for a reevaluation of this approach. Enough is enough.”
Wes Wilkes, NTWRK Ceo at Net-Worth NTWRK, states “The Bank of England should not raise rates this week, but it will. Raising rates is a knife in this particular inflationary gunfight, but it’s the only weapon Threadneedle Street has. It is a fight of the Bank’s own making due to it being so late in tackling inflation.”
Justin Moy, Managing Director at EHF Mortgages, states “This would be the right time for the Bank of England to do nothing after 11 consecutive increases over the past year or so. The markets are telling us all that rates can drop soon once inflation is under control, so to increase bank rate now seems a little pointless and just ebbs away at the confidence of borrowers, both individual and businesses. We need the ‘good mood’ of the Coronation to continue up the road to the Bank of England.”
Craig Fish, Director at Lodestone Mortgages & Protection, states “We still haven’t truly seen the result of the previous interest rate hikes, and so for once, I hope the MPC sees sense and pauses for breath, keeping rates on hold. We are slowly starting to see the green shoots of recovery and any rash decisions now will be harder to undo further down the line, so whilst I expect to see a 0.25% increase, I hope that we don’t.”
Fanny Snaith, Owner at Fanny Snaith – Certified Money Coach, states “I think it is too soon to raise them again. Standard mortgage rates are nearing 8%. For those needing to renew this year, the monthly repayment will be too high for them to meet. For landlords, new buy-to-let rates will be too high to make the property profitable. Then what? The crash? Hang onto your hats, folks.”
Graham Cox, Founder at SelfEmployedMortgageHub.com, states “Should the Bank of England raise the base rate? No, as it’s unlikely the effects of the most recent hikes have kicked in yet. Will it? Yes, as not doing so when the Fed and ECB have just raised their rates could cause Sterling to weaken against the Dollar and Euro, which is inflationary as imported goods become more expensive. On the other hand, raising rates risks over-tightening and causing huge damage to the economy. Talk about being between a rock and a hard place.”
Ross McMillan, Owner/Mortgage Advisor at Blue Fish Mortgage Solutions, states “It’s difficult to see how any other outcome other than a rate rise can be expected from the Bank of England each time they meet these days. The headline inflation rate stubbornly refusing to drop by a significant amount does not allow the decision-makers any leeway. The more fundamental question is why those same power bearers continue to believe and utilise such a blunt lever to tackle inflation when all the evidence and data would appear to show little positive impact of recent hikes. Until external international factors are addressed, such localised tinkering is unlikely to do anything more than load further financial pressure on individuals and families already struggling to make ends meet. From a mortgage perspective, any change in the base rate will not directly influence payments for most or what lenders are willing to offer on a fixed rate deal but the almost 10% month-on-month increase in the more significant SWAP rates has already seen available rates rise for many.”
Andrew Montlake, Managing Director at Coreco, states “The Bank of England will no doubt feel that they have to act to take the base rate higher, but they have a careful path to navigate. While the markets look to have priced in another quarter-point rise, the danger is that the Bank will once again go that step too far and cause more issues further down the line than they are able to solve now.”
John Choong, Equity Research Analyst at Investing Reviews, states “Double-digit headline CPI inflation continues to spook the markets. However, it’s worth noting that this is due to the high weightage in food costs, which continues to edge towards 20%. Nonetheless, green shoots are starting to pop up, and the Bank of England should take note of this as it shouldn’t make the same mistakes the FOMC has done by assessing backwards-looking data. Wholesale food prices are continuing to trend down, and the recent Kantar and CGA figures show some promise in a possible decline in the months to come. The same effect should be felt with utilities, as lower wholesale gas prices should start to flow through to bills as well. All this means that inflation is more likely to fall in the near term than not. And with the UK now expected to narrowly avoid a recession, the Bank of England shouldn’t plunge us into one due to their lack of insight.”
Rob Gill, Managing Director at Altura Mortgage Finance, states “In the face of sticky inflation, it seems increasingly likely that the Bank of England will seek to hike by a further 0.25%. This is largely priced in by mortgage lenders, and there is widespread expectation inflation and interest rates will fall late this year and early next.”
