Next week is the June meeting of the Bank of England’s Monetary Policy Committee (MPC). It will be held a day after the data on the current state of inflation is shared. Last month inflation reached closer to the target rate of 2.0%, falling from 3.2% to 2.3%. However, as close it fell to target it was short of the forecast for 2.1%. Depending on the inflation report released on 19 June, the MPC will vote to either keep the current standard base rate steady or offer an earlier than expected surprise cut.

The scheduled meeting of the Bank of England’s Monetary Policy Committee (MPC) is next week. It is the meeting that had once been considered to result in a cut to the standard base interest rate. However, the forecasts leave little hope for that to happen. The current rate of 5.25% will likely be voted to stay in place by the majority of the members. Without a meeting scheduled for July, the next hope will be for one in August. 

According to those on the inside of the housing market, purchases appear to be slowing down. This is a surprising outcome due to the recent strength of demand shown in the market only last month. It could be hopeful home buyers are not backing away from the market but simply waiting out for the Bank of England’s Monetary Policy Committee (MPC) to cut the standard base interest rate. When that could happen is either likely this month or in August.

There had been hope of a cut by the Bank of England’s Monetary Policy Committee (MPC) to the standard base interest rate by early spring. As inflation held on, optimism declined and the forecast was for one possibly in June. However, now it is more likely to be in August according to experts. Lenders had been cutting their own offerings, but as the expectation for a June reduction of the base rate has been replaced with one later, lenders have begun to raise their rates.

According to a recent report from Rightmove, mortgages rates are lower than they were a year ago. The cheaper lender rates have come onto the lending market without a cut in the standard base interest rate by the Bank of England’s Monetary Policy Committee (MPC). The reasoning for the lower rates is due to the optimism for inflation to reach target and the committee to vote for the first cut to the base rate since March 2020. The lower lender rates available are an opportunity for borrowers to secure deals that would likely appear when the MPC does cut the rate.

There are many homeowners that will come to the end of their mortgage term in 2024. When their term expires, they will either shop for a remortgage or they will allow their lender to transition them to their standard variable rate (SVR). Avoiding the SVR could bring savings as it is normally a much higher interest rate than found with a remortgage. However, there are unique circumstances this year and homeowners may be trying to create a strategy of wait and see. Interest rates are high, yet there are expectations of lower rates to come. Homeowners might believe a SVR is a good choice to wait out for rate cuts to the lowest interest rate remortgage, but they would be paying more than necessary with no savings to be found.