Sharp Criticism for "obstinate" Bank of England over rate hold

There’s been particularly sharp criticism for the Bank of England’s decision at the end of last week to hold base rate at 5.25%.

The concern is that the Bank’s caution is damaging the housing market in particular, and the broader economy in general.

Ben Allkins, head of mortgages and protection at Just Mortgages, says: “If there was ever a time for the Bank of England to finally pull its finger out, this was certainly it. Yet, in spite of inflation finally reaching the illusive 2% target, and recent GDP figures showing a flatlining economy, the MPC is still watching and waiting.

“While we can be encouraged by positive levels of buyer registrations and requests for valuations and appointments, a cut today would have been a real adrenaline shot to help carry us through a summer full of potential distractions – particularly with a general election. For now, we just have to hope swap rates react favourably to further stability in the base rate, giving lenders some wiggle room to reprice.

“With potential borrowers still desperately trying to navigate the market and deal with clear affordability challenges, brokers must stay visible and proactive, highlighting the wealth of options out there to support all types of borrower, as well as the cash that is still available from lenders willing to lend.”

David Hollingworth, of broker L&C Mortgages, comments: “There’s just a lack of relief for those on variable rates. You’re going to be hanging on every word that comes out of the Bank of England.

"There’s been a lot of talk about when the base rate will be cut and it’s painful for those still waiting for that. Sadly, it looks like it will be August at the earliest. It also means that the descent of the base rate hasn’t started as early as would have been hoped, so there may not be as many cuts as they were hoping for.

Most outspoken of all is Jonathan Bone, lead mortgage adviser at Better, who comments: "Borrowers have waited three long years for inflation to return to the 2% target.  Now that it's finally happened, the excitement has dampened as underlying price pressures in the economy have not slowed as quickly as expected, and the ongoing election likely hasn't helped either.
 
He says the Bank of England is "obstinate" and "unwilling to take action despite widespread criticism", adding: "Those with mortgages are desperate for relief."