The Bank of England has held rates for the third month in its final interest rate decision of 2023.
The central bank keep rates at 5.25 per cent in an effort to meet the 2 per cent inflation target.
The Bank of England’s Monetary Policy Committee voted by a majority of six to three to maintain the bank rate - with the three members proposing increasing it by 0.25 percentage points, to 5.5 per cent.
Governor of the Bank of England, Andrew Bailey said: "The MPC will continue to monitor closely indications of persistent inflationary pressures and resilience in the economy as a whole, including a range of measures of the underlying tightness of labour market conditions, wage growth and services price inflation.
"Monetary policy will need to be sufficiently restrictive for sufficiently long to return inflation to the two per cent target sustainably in the medium term, in line with the committee’s remit."
Chris Little, chief revenue officer at Finova, said the news would be welcomed by homebuyers.
He added: "As we step towards the new year, some buyers will still be looking to settle down and lenders and brokers should plan to ensure they are meeting borrowers’ shifting financial needs in 2024.
"Increasingly, financial institutions and broker firms alike are waking up to the value of technology to streamline their service.
"For lenders, investing in these digital tools early on will ensure they are best placed to give their clients access to the most personalised and fair rates on the market, all while protecting their own risk.”
Adam Ruddle, chief investment officer at LV, said a cut to the rate is now expected in 2024.
He said: "Whilst agreeing that rates are likely to be cut next year, I believe the markets may be slightly disappointed having already priced in five quarter point rate cuts in 2024. Rate cuts will be a relief to the UK public who will likely feel the effects on their finances next year."
While Jonny Black, chief commercial and strategy officer at Abrdn, thought reductions could not come until 2026.
He said: "The Bank of England has been clear that it doesn’t plan to drop interest rates until the risk of inflation resurging has passed. Today’s ‘hold’ decision shows that it feels now is still too soon to do this.
“It’s not clear when rate reductions will come – new forecasts released earlier this week suggest it could not be until 2026.
"Clients will value reassurance that their savings and investment strategies are adapted to deliver good outcomes for them given under current conditions, and that their advisers are on hand to help them make changes to their strategies should circumstances change quickly in the future."
tara.o'connor@ft.com
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