Bank of England January 2020 base rate meeting

With just one day to go before Brexit, the Bank of England (BoE) met and issued an unpromising forecast.

The central bank opted against a rate cut, though it warned of slow growth following Britain’s departure from the European Union.  

The Bank of England’s Monetary Policy Commitee (MPC) voted 7-2 in favour of keeping the base rate at 0.75%.

Forecasting growth of just 0.8% in 2020 the BoE predicted a drop from 1.3% in 2019. Though, encouragingly a rise to around 1.5% in 2021 is envisaged.

There was much speculation that there may have been a base rate cut, although historically these are rare in January. The underlying state of the economy is still very uncertain; and this will likely continue, certainly during the Brexit transition period, currently due to end on 31 December of this year.

It’s not the first time in recent years that some members of the MPC have voted for a rate cut. However, spring is traditionally the busiest time of the year for the housing market, so some mortgage lenders have chosen to cut their margins and drop their rates regardless of the BoE decision.

It remains to be seen, as economic figures change, whether the MPC’s view will alter in the coming months, especially with a new governor of the BoE due in place in the summer.

If you are concerned about the current economic climate, about keeping up repayments on your home or any other mortgage matter, please do give us a call. We are happy to chat through your situation and offer any necessary advice or guidance.

February 2020