The Bank of England has held interest rates at 5.25% but has signalled that its next move will probably be down
In its forecast the Bank said it expects inflation to be back at 2% target by May but doesn’t think it will stay there and is still concerned about Wage growth leading to higher inflation
Savings expert and CEO of My Community Finance, Tobias Gruber, said: “While interest rates are on pause, savers should act now to lock in top savings rates. If you’ve got money saved you should use this opportunity to boost your earnings and make them work harder for you.
“Frustratingly traditional banks were woefully slow to pass on the benefits of high interest rates last year, so don’t wait for your bank – take charge and explore options from different savings providers such as credit unions and challenger banks to find the best deal.
“Just like shopping around for broadband or car insurance, you should be comparing savings providers to find the best deals. Experts are predicting a fall in interest rates this year so seize this opportunity before the best rates disappear.”
Mortgage broker, Jonathan Bone, Mortgage Lead at Better.co.uk, said: “Despite the unexpected increase in inflation towards the end of last year, the Bank of England decision-makers have held their nerve and maintained the base rate. This provides a modest silver lining for homeowners, as it encourages lenders to keep their rates stable.
“Forecasts from experts suggest a potential decline in the base rate by July and even more so by the end of 2025 – positive news for those aspiring to step onto the property ladder.
“Nevertheless, the reality stands that homeowners reaching the end of their fixed deals will need to allocate more funds to cover the higher cost of their mortgage repayments. The average two-year fixed rate has doubled compared to two years ago and experts anticipate that rates may not dip below 3.5% for several years.
“I strongly recommend speaking to a mortgage broker as soon as possible so they can look at your options, including variable rate and tracker mortgages. A broker will help you secure the right deal for you, even if mortgage rates fall during your application.”
