An uncertain economic outlook means that most commentators are predicting that the Bank of England’s Monetary Policy Committee will today vote to keep the base rate at 4.5%.

Trump’s tariff threats, rising employers’ NIC contributions and the prospect of trade wars are making the future path of both the UK’s economy and its inflation very difficult to predict.

Weak economy

It means the Bank of England is likely to take a cautious approach to any changes in the base rate.

The UK’s latest economic data shows that inflation rose from 2.5% to 3% in January and although service inflation hit 5%, it was less than expected.

At the same time, there was an unexpected 0.1% contraction in what is already a fairly weak economy. And, despite the deterioration in the labour market caused by the looming NIC rise, wage inflation was as high as 6.2%

The Bank of England is currently predicting that inflation will climb up to 3.7% in the summer.

Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, says: “The Bank of England’s decision will be closely watched. While rates are expected to remain at 4.5 %, any signal of an imminent cut would provide relief to buyers, particularly those relying on high-value mortgages.

“The minutes of the meeting will also be closely scrutinised as a clearer roadmap for rate reductions would help restore confidence and encourage market activity.

“The key question is whether Reeves and the MPC will act to support growth –  or introduce more hurdles for the property market to navigate.”

We need long-term growth and stability across the board, so a cautious approach is needed when looking ahead.”

Toby Leek, President of NAEA Propertymark, says: “There’s wide speculation that interest rates will remain unchanged on the back of tomorrow’s decision. It’s likely that factors such as tax rises due from April and wider political and economic turbulence ongoing, that the Bank of England is waiting to see how these play out and will potentially be reluctant to make any decisions to lower rates before then.

“Thinking sensibly, despite the desperate need from many to see an easing in their increased expenses, we need long-term growth and stability across the board, so a cautious approach is needed when looking ahead.”

Gareth Lewis, managing director of specialist lender MT Finance, says: “This holding pattern may indicate the beginning of a more normalised interest rate environment, ushering in a welcome period of predictability.

“Lenders can refine offerings and consider competitive adjustments to match the environment. We expect transaction volumes to continue the upward recovery trajectory, as market participants operate with greater certainty.”

President Trump’s erratic trade policies is adding fresh risks to the economic outlook.”

Nicholas Mendes, Mortgage Technical Manager/Head of Marketing, John Charcol says:  “The decision will be made against a backdrop of global uncertainty, with President Trump’s erratic trade policies adding fresh risks to the economic outlook.

“The potential for new tariffs has unsettled markets, while the UK government’s upcoming Spring Statement could introduce further fiscal tightening, adding to the challenges facing businesses and households.”

Read more about previous base rate decisions.