The Bank of England has announced the base rate will stay at 5.25% for at least another six weeks.
Thursday 2 November 2023 15:18, UK
We're wrapping up our coverage of the Bank of England's latest interest rates decision.
If you missed anything, you can catch up by scrolling through the blog below.
A pause on interest rates will bring "little relief" to struggling families, anti-poverty charity the Joseph Rowntree Foundaton has said.
Chief economist Alfie Sterling said people across the UK are "in the grip of a suffocating squeeze" from rising prices, the increasing cost of a debt and a recent "sharp" increase in unemployment.
He said millions of people are "just one life event" away from need support in the current conditions.
"Further targeted support from government is now vital," Mr Sterling said.
If you're just coming to this blog, here's a reminder of what the Bank of England said as it announced its decision to hold interest rates at 5.25% for the second month in a row:
Today's holding of interest rates is welcome news for prospective buyers and those with mortgage deals expiring soon, experts have suggested.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said the move was a "welcome pause for breath" for homeowners and house hunters who have been "wrestling with runaway rate rises for almost two years".
She said no "big rate movements" were now expected for either savings or debts as the expected pause had been priced in by lenders.
Tracker mortgages will hold steady as they follow the base rate, but fixed rates could drop slightly, Ms Coles said.
"They have already fallen from a recent peak in August, because fixed rates are mainly driven by expectations, and over the past few months, more market players became convinced this was the peak for rates," she added.
Ben Thompson, deputy chief executive at the Mortgage Advice Bureau, said another hold shows the Bank of England has likely ended its hiking cycle - but warned this could change in the coming months and "we mustn't get complacent".
"The mortgage market has already seen drops in the swap rates used to calculate mortgage prices, and there is hope that a second consecutive pause might mean more reductions ahead for homeowners," he said.
Meanwhile, Thomas Jackson, managing director of Cooper Associates Mortgages, said an increase in the rate would have sent mortgages rising further and a base rate hold "is the best way forward".
He said after six weeks of market stability, the decision to hold at 5.25% will "enable this trend to continue".
"Tighter household budgets in Q4 may mean that inflation falls without another base rate increase at all, but time will tell," he said.
By James Sillars, business news reporter
The energy price cap is set to rise in January at a steeper level than initially expected due to "growing volatility" in global wholesale costs, according to a closely watched report.
Market specialist Cornwall Insight said the Israel-Hamas war and the effects of industrial action overseas had contributed to a shift in its energy price cap predictions since September.
Then, it had seen the average annual dual fuel bill, paid by direct debit, rising by an average 拢64 in January on the current cap level of 拢1,834.
But it said on Thursday that it now saw January's sum rising to 拢1,923 per year - with a small, further, increase to 拢1,929 from April.
For the answer to this we go to the head of personal finance at Hargreaves Lansdown...
"We may well have passed the peak for savings, with some of the best fixed rates gradually disappearing. The good news is that the market hasn't moved particularly swiftly to reduce savings rates."
Sarah Coles, Hargreaves Lansdown
With the Bank of England indicating rates could remain high for longer than expected, "it means there are still decent rates around, so if you have savings you won't need for the next year or so, it's still worth taking advantage while you can".
Moneyfacts, in a new update, put average savings rates (based on 拢10k gross) at:
The holding of interest rates will be "cold comfort" for millions of people who face large hikes in their mortgage payments, says Lib Dem treasury spokesperson Sarah Olney.
She said: "The public are watching big banks being handed insulting tax cuts by this government, all whilst mortgage bills spiral. Frankly, the whole thing stinks.
"It's time the government scrapped their big bank tax cut and provided help for families."
With the Bank of England saying rates could remain high for longer, and one expert suggesting they could stay over 4% until 2029 (see 12.23 post), we thought we'd take a look at a historical view of rates...
Of course, people who had mortgages through the 80s and 90s will tell you rates were much higher then - but it's important to say that, while that's right, people had far lower debt loads in those days.
Economists are reacting after the Bank of England held the base rate where it was - as predicted.
KPMG chief economist Yael Selfin said though the inflation projection had been revised down, there was "still some way to go" before the BoE could "confidently say" price rises were under control.
"We expect the next couple of months to bring little change to the overall level of interest rates as inflation continues to gradually descend towards its target," she said.
The Bank will likely look to ease policy later in 2024, she added.
Carsten Jung, IPPR senior economist, said the Bank's rate was "still likely too high".
High rates will take more than a year to fully take effect, meaning there is a risk its Monetary Policy Committee could keep rates "too high for too long".
"The Bank also is not transparent enough about how it models 'passthrough' inflation, nor how it expects corporate profits to evolve 鈥� both of which are key for understanding inflation at this point," he said.
Meanwhile, George Lagarias, chief economist at Mazars, warned against another hike which could tip "a barely growing economy into a recession".
"External members seem to disagree, possibly adhering to stricter economic dogma. However, the Bank's intention is now clear, and the scale has been tipped for growth rather than for controlling inflation," he said.
Mr Lagarias said the next few months would likely bring "little change to the overall level of interest rates" as inflation was projected to come down slowly.
Our economics and data editor Ed Conway asks if the pain being felt by households is due to high interest rates, rather than other cost of living pressures, and whether it is "a price worth paying to bring inflation down".
Andrew Bailey, Bank of England governor, responds that he doesn't believe that is "the right language to use".
He says: "If we don't get inflation down, then the pain is worse."
Mr Bailey said inflation hurts the least well off the hardest, and is "even harder" when it affects essentials such as energy and food.
But he insists the Bank is seeing "encouraging progress".
"We've got to see this through and that's what underlies," Mr Bailey adds.
