‘Super Thursday’: it may sound like something dreamed up by the American Football governing body’s marketing department but there was far less drama last Thursday than in even the dullest of gridiron contests.
The change to Bank of England policy – publishing the Monetary Policy Committee’s decision on rates, the minutes of its meeting and the inflation report at the same time – has its supporters and detractors, the latter arguing that too much information will be released in one go. The reality, however, is that FCA consultation papers often dwarf the minutes and the inflation report combined.
While the Bank’s move for greater transparency was quite interesting, the main attraction was always going to be what the committee decided to do about base rate.
In truth, it was never in doubt that it would maintain base rate at a record-low 0.5 per cent. But with improvement in the economy and wage growth, many economists prior to the vote last Thursday had predicted a 7-2 split in voting.
As it happened, just one member – Ian McCafferty – called for an immediate rise in the benchmark rate, which is significant as it is the first time this year that the MPC has not been unanimous.
So nearly a week on from Super Thursday, where does this leave the market and borrowers? Pretty much where we were. An increase in base rate does not look imminent and many are forecasting a rise around the seventh anniversary of the last change – March 2009.
The MPC’s lack of activity may breed complacency among borrowers, lowering a remortgage in their priorities. But as mortgage professionals will be aware, a base rate is coming.
It is time to let your clients know that.