Phoebus comment on the MPC's base rate decision

06 November 2025

Richard Pike, chief marketing and sales officer at Phoebus, says:

“We expected the Bank of England to hold the base rate at 4% as it attempts to balance wage and price inflation and economic stimulus. While the most recent CPI data showed inflation was lower than expected, it remains well above the Bank’s 2% target, so the MPC’s decision is no surprise. The good news for borrowers is that mortgage rates have fallen in recent weeks, with the average rate dropping below 5% this week for the first time since September. This is no doubt in anticipation of future rate reductions and lenders competing to attract new business ahead of year-end. With one more MPC vote this year, it remains to be seen whether the Bank will serve up an early Christmas present for the market.

“What is certain however is that Labour will be increasing taxes, with Rachel Reeves warning in her pre-Budget press conference this week that everyone will have to pay more to repair Britain’s finances. This could have big implications for affordability with many households already struggling with the cost of living.”