The Bank of England has opted to hold the base rate at 4.25% – but its Governor indicated that further rate cuts will happen this year.
Andrew Bailey (pictured) said we are “seeing signs of softening in the labour market” which means interest rates “remain on a gradual downward path”.
Three members of the Bank’s Monetary Policy Committee voted for a base rate cut to 4.0%, though they were outvoted by the remaining six members.
The financial markets expect a base rate cut at the next meeting in August, followed by at least one more by the end of the year.
Robin Chalk, head of tower bride at Anderson Rose, said: “The hold on interest rates from the Bank of England is something we view as a positive. However, even with our optimistic outlook we still do acknowledge that a reduction would have been the best and most ideal outcome to offset increased stamp duty and the continuing buyer uncertainty.
“We feel that would prompt buyers to start taking advantage of increased sales supply and arguably the best buying conditions for many years.
“We also need a more positive economic attitude to create growth. But we appreciate that with the changing global landscape this is highly unlikely.
“While we’re happy with the recent decision, if inflation was to rise sufficiently for rates to increase again, this would no doubt be a disappointment and viewed very negatively, however, ironically it may equally serve to prompt buyers to get off the fence and take advantage now rather than keep on waiting!”