Brokers divided over MPC base rate decision

Research by Mortgage Express shows brokers are split over whether rates will change at the next MPC meeting, with 53% expecting a rate hold, versus 47% expecting them to rise.

Overall, 224 brokers were surveyed this week by Mortgage Express asking for their view of how the MPC would vote at next weeks meeting (5-6 July) which could see an 11th consecutive hold.

Peter Charles, chief economist at Mortgage Express, says: This is a very interesting result.

“Having spent nearly a year at 4.5%, and with a 7-1 majority at the last vote, the general consensus is that rates will remain unchanged in July.

Brokers appear to be picking up on signals that rates could see a 25bp rise before the end of the year.

“Earlier this month, the Governor of the Bank of England, Mervyn King, warned that there had been signs of increased inflationary pressures in the main industrial countries. These are not yet apparent in the UK.

“But if the boost to spending provided by the World Cup continues on into the second half of the year, then the MPC must be expected to raise rates. However, for the moment, it appears that opinion is split over what the next MPC meeting will bring.”