Bank of England holds rates steady

Neil Rudge, Chief Banking Officer for Commercial at Shawbrook, commented on the Bank of England's (BoE) decision to hold interest rates steady this month. He noted that the BoE is awaiting stronger recovery signals after a previous rate reduction before making further adjustments. Rudge acknowledged that while this decision may be disappointing to the business community, it is essential for ensuring long-term economic recovery and sustainable growth. Despite ongoing high borrowing costs, business leaders remain optimistic. There is robust demand for funding from midsize businesses across various sectors, reflecting a widespread confidence and focus on growth among the UK’s small and medium-sized enterprises (SMEs). As economic conditions improve, many businesses with forward-looking approaches are beginning to activate previously stalled plans, which is a promising sign for the UK's economic future.

Joe Pepper, UK Chief Executive Officer at PEXA, also weighed in on the BoE's decision. He described the hold on the base rate as disappointing but expected, given recent inflation figures. Pepper highlighted that the upcoming November MPC meeting will be closely watched, with the outcome potentially influenced by the Labour government's first Budget. Regardless of whether the rate is adjusted, there is anticipated to be a significant surge in demand in the final months of the year, driven by millions reaching the end of their fixed-rate mortgages. This increase in demand could exacerbate pressures on an already strained conveyancing infrastructure.

Pepper emphasszed the need for a digital overhaul of back-end processes and technology to address these challenges. He called for private investment and strong governmental support to modernise the sector effectively. Cross-sector collaboration is crucial to achieving this modernisation and ensuring that the system can handle the anticipated demand efficiently.