Bank of England holds rates at 3.75%

The Bank of England has just voted 6-3 to hold interest rates at 3.75%. The three dissenters wanted to raise them further, warning that if the conflict in Iran continues, a hike may still be needed. Mortgage lenders haven't waited to find out, several have already been pushing rates up over the past few days.

The average two year fixed mortgage rate now sits at around 5.6%, already pricing in the risk of a future rise before the Bank has even made one. Whatever the committee decides next, borrowers are already paying for it.

Is this the right call?

Look at what the ONS is actually reporting right now. Youth unemployment stands at 16.4%, an 11 year high. Job vacancies have fallen to their lowest level since spring 2021, down to around 712,000. That's not a labour market that looks like it needs cooling further. It's one already showing real strain, and the Bank's own dissenters are talking about raising the cost of borrowing on top of it.

The bottom line

Whatever happens next, mortgage costs have already moved. If you're coming up to a remortgage, it's worth getting advice sooner rather than waiting to see what the Bank does at its next meeting.

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A personal note from me

Youth unemployment at an 11 year high. Vacancies at a 5 year low. The economy is already struggling, and the Bank's hawks want to raise the cost of every mortgage on top of it. So I'll ask: cleverest people in the room, or just plain dumb?