The Bank of England has kept interest rates on hold at 0.75% after declaring that economic growth in the UK has been stronger than expected.
Interest rate increases could be “more frequent” than expected if the economy performs as the Bank of England is expecting, governor Mark Carney says.
Following on from the Bank of England’s interest rate announcement, please find below some reaction comments.
Managing Director of One77 Mortgages, Alastair McKee, commented:
“In the current climate of Brexit uncertainty, a freeze in interest rates was one thing that we could bet on.
While wider market conditions remain tough, this further assurance of continued mortgage affordability should help boost confidence in an otherwise beleaguered property market.
However, although today’s news will help stimulate buyer sentiment, fuelling buyer demand is a temporary plaster over the issues surrounding the UK market and we still need to address the wider issue of supply to improve its long-term health.”
Jerald Solis, Director, Experience Invest
“It’s not surprising the Bank of England has decided to keep interest rates on hold. Since the global financial crisis, the BoE has taken a very cautious approach to the interest rates, and Brexit uncertainty has made things even more complicated. However, it is positive to note that the BoE is also more optimistic about the future growth prospects of the UK economy, demonstrating that Brexit is not undermining national productivity in the long-term.
“The low interest rate is positive news for prospective homebuyers looking to get on the market, not to mention landlords and property investors expanding their real estate portfolio. After all, a wave of recent tax changes have increased the costs faced by landlords when building and managing a buy-to-let portfolio. Of course, there are still issues to be addressed, such as home affordability. While low interest rates make mortgages more accessible to people, rising house prices and issues of affordability mean that even now, people are struggling to get on the property ladder and the market is slowing. That’s why more action needs to be taken to increase the housing supply, and new-build developments are a core part of this solution.”
Paresh Raja, CEO of Market Financial Solutions
“Today’s announcement is largely predictable, but it does contain some positive messages. However, the underlying feeling is that the BoE’s statement simply shows how the delay to Brexit is impacting people’s financial planning.
“If even the UK’s central bank is unwilling to budge or commit to change until clarity is obtained regarding Brexit, then it is understandable that consumers, investors and businesses will also adopt a ‘wait and see’ approach to any major decisions. Ultimately, the economy has proven resilient during these challenging conditions, and the more optimistic growth forecasts are a welcome reflection of this; but the onus is now on Theresa May and the government to act fast in reaching a conclusion on Brexit and not to waste time until the new October deadline.”
Jamie Johnson, CEO of FJP Investment
“There is nothing much to really take from the BoE announcement today. The property market has been left in the dark for quite sometime, and while demand for real estate remains strong, we cannot overlook the fact that more investors are holding back from making big financial decisions until there is some greater clarity from the Government on Brexit. Just like the interest rate, things are very much on hold at the moment, and while there are some positive growth forecasts to take from the Chancellor’s announcement, the country is calling for greater leadership and guidance.
“Important, with affordability a key issue affecting the housing market, it’s clear we need to build more home. And as such, more needs to be to ensure construction firms receive the support they need so they can add more stock into the housing market – this is something I would like to see the public and private sector strive towards over the coming months.”