Reflections Ahead of Today’s Bank of England Interest Rate Decision – TNT

At midday today, the Bank of England will announce its latest interest rate decision and publish its Monetary Policy Summary.

The current Bank Rate of 4.25% has been in place since April this year, while one year ago it stood at 5.25%.

The existing interest rate looks set to stay at 4.25% following the latest inflation data.

The May inflation figure, published by the ONS yesterday, remains at 3.4% and is predicted to rise over the next few months before falling towards the target rate of 2%.

Industry thoughts:

Moreas Madani, founder of Tyburn, said: “The general consensus is that the BoE will hold interest rates at 4.25% tomorrow, reflecting the current level of inflation and the ongoing global uncertainty. In such environment, we do not anticipate any major shift in market activity. Uncertainty continues to weigh on sentiment, and stability in rates is unlikely to change the status quo significantly.”

John Preston of LH1 Global commented: “With Bank of England holding interest rates at 4.25% we would not expect a great deal of change within the property industry, as there are several other factors that we would consider to be more significant at this time than a few percentage points to the base rate. Undersupply of housing for both the rental and owner-occupation market remains a more significant factor for the pricing of property and is one of the priorities of this Government to address; however, with inflation data reported today as being higher than expected, were there to be a 0.25% drop in the base rate against most expectations, this would likely still be welcomed by those looking to borrow or remortgage.”

Matt Smith, Rightmove’s mortgage expert, remarked: “As the rate of inflation stays above 3%, the expectation is that the Bank of England is set to act cautiously. Anticipation had risen that we may be in line for multiple Base Rate cuts this year at the peak of tariff uncertainty, but as some of these pressures have eased, this expectation has fallen back. Forecasts for the rest of the year are likely to jump around a bit due to ongoing global uncertainty and changes in how the market expects things to pan out. However, the current view is that we’re only expecting one more Base Rate cut this year, and tomorrow’s decision by the Bank of England is likely to be a hold.”

John Phillips, CEO of Just Mortgages and Spicerhaart, noted: “Inflation holding firm in May feels like a rebalancing after April’s figures reflected the likes of Easter air fares and many one-off factors, while higher costs at the supermarket and on other household goods in May prevented any chance of making positive progress. While stability is good, I still wouldn’t be planning my rate cutting party for [today’s] MPC decision as the central bank is likely to keep to its careful and gradual approach. “

Chris Little, chief revenue officer of Finova, said: “Looking ahead, much will hinge on the pace of interest rate cuts, future income growth, and inflation trends, with [today’s] Bank of England decision likely to hold steady but watched closely for signs of easing.”

Jonathan Handford, managing director at Fine & Country, commented: “Although price growth has not accelerated, inflation remains above target, complicating the Bank of England’s rate-setting ahead of tomorrow’s meeting. A hold at 4.25% remains the most likely outcome, but uncertainty lingers over future monetary policy. While the recent rate cut offered a degree of financial relief, elevated borrowing costs are still dampening activity, particularly at the more affordable end of the market. With demand quietly building beneath the surface, the right conditions could help unlock a more inclusive and stable recovery.”

Iain McKenzie, CEO of The Guild of Property Professionals, said: “While the Bank of England is expected to hold rates this week, the overall interest rate cycle is on a downward trend. More importantly for buyers, lenders have already begun to relax affordability criteria and revise stress-testing, in some cases boosting borrowing power by up to 13%. This tailwind that will play a crucial role in driving transactions for the remainder of the year. With steady demand, improving affordability, and more choice for buyers, the UK housing market is on a very firm footing for the rest of 2025.”

Babek Ismayil, founder and CEO of OneDome, added: “A hold at 4.25% is likely in [today’s] meeting – but uncertainty around the pace and timing of further cuts is keeping both buyers and lenders cautious. For the housing market, this ambiguity matters. While the recent rate reduction has offered some relief to borrowers, mortgage costs remain elevated compared to recent years. This is particularly acute for first-time buyers and movers at the lower end of the market, where even small changes in monthly repayments can make or break affordability. Transactions remain subdued, and what that tells us is that interest rates alone won’t fix this market.”