The UK’s central bank has opted to keep the base rate of interest steady at 5.25%, as anticipated, despite an unexpected decline in inflation.
During its meeting on Wednesday (March 20), the Monetary Policy Committee (MPC) of the Bank of England voted by a majority of 8–1 to retain the bank rate, marking the fifth consecutive occasion of no change.
February witnessed inflation dropping slightly faster than forecasted, registering at 3.4% for the month, marking its lowest level in two and a half years. While some economists had speculated about a potential reduction in the base rate, possibly in June or August, the MPC has chosen to uphold the existing rate for now. 
Andy Mielczarek, the founder and CEO of SmartSave, a Chetwood Financial company, cautioned against lowering the base rate at this juncture. He pointed out that the central bank may be apprehensive about the possibility of an inflation uptick due to anticipated tax cuts and minimum wage hikes in the forthcoming months.
Paresh Raja, CEO of Market Financial Solutions, acknowledged that while the inflation data may not have sufficiently influenced the Bank of England’s decision, the property market has been benefiting from the stability of a static rate. Raja observed a positive impact on mortgage rates, buyer demand, and overall growth in house prices, indicating a robust start to the year for the property sector.
He emphasized the need for both buyers and lenders to adapt to the current interest rate environment, suggesting that even in the event of a future base rate cut, the adjustment to lower rates may not occur as rapidly as the initial increase, necessitating a recalibration of expectations in the market.
