Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.

Bank of England holds base rate at 3.75% for sixth consecutive meeting

The Bank of England has held interest rates at 3.75% for a sixth consecutive meeting. Members of the Monetary Policy Committee voted by a majority of 6-3 in favour of freezing the base rate, in line with most economists' expectations.

Three members of the committee voted to increase the base rate by 25 basis points to 4%. The decision comes with inflation having risen to 3.1%, which the MPC expects to climb further as higher energy prices have knock-on effects. Higher bills could, for example, force businesses to increase their prices to cover costs.

Middle East conflict cited as factor

The MPC said that conflict in the Middle East pushed up energy and motor fuel costs, and that it is difficult to predict what will happen next. Bank of England governor Andrew Bailey said that so far, higher global energy costs have had a limited effect on price and wage setting in the UK, but warned that the longer this volatility persists, the bigger the impact it will have on inflation — and the more likely it is that the Bank will need to raise Bank Rate to ensure inflation falls back to its 2% target.

Lender rate rises continue

The hold follows a raft of rate rises from lenders in recent weeks, with many increasing prices twice already this month. Mortgage industry commentators were largely supportive of the MPC decision, though some argue that it is now time for the Bank to take steps to curb inflation.

What it means for lettings professionals

For letting agents and inventory clerks, the sustained hold at 3.75% offers a measure of near-term stability in the cost environment. But with lender rates having risen repeatedly this month and inflation forecast to climb further, mortgage costs facing landlords may continue to come under upward pressure. Any further rate rises signalled by the Bank could affect landlord borrowing costs and, in turn, the rental market dynamics that agents and clerks operate within.