Bank of England holds interest rates at 5.25 percent - what it means for your mortgage

The Bank of England has announced it has frozen interest rates at 5.25 percent. At its meeting today (March 21), the bank's Monetary Policy Committee (MPC) voted by a majority of 8 to 1 to hold the base rate as it is, for the fifth consecutive time.

After several continuous hikes over the course of last year, the interest rate has now been sat at 5.25 per cent since August 2023. Many hoped that February's lower-than-expected 3.4 percent inflation figure announced yesterday (March 20) would provoke a lower base rate, but sadly this was not the case.

The Bank's rate influences how much homeowners pay for their mortgage, and due to the current high rate, many people are now paying much more each month than they used to. Following the Bank of England's decision to pause the base rate again, many experts are calling for the Bank to seriously consider cutting it in a bid to help boost the UK's 'stagnating' property market.

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“David Hannah, Group Chairman of Cornerstone Tax, comments: "2023 was an extremely turbulent year in the UK property market, with successive interest rate increases and a generally hawkish approach to the control of inflation by the Bank of England. Emerging trends indicate that the BoE may have overcompensated at the expense of the property market.

“February's inflation figures and mortgage approvals should indicate an overall cooling off of the UK economy which must be acknowledged by the BoE and, in an effort to avoid a sudden crash of inflation, will increase pressure on the MPC to start reducing interest rates sooner rather than later.

"I’d urge the MPC to seriously consider cutting the interest rate