‘It's not enough!’ Locals in West Midlands fume over Bank of England’s interest rate cuts

Rates reached their highest point in August 2023 when they were raised to 5.25 per cent, since then the Monetary Policy Committee at the Bank of England has chosen to hold rates whilst inflation fell to its target of 2 per cent.

Announcing their decision today, Governor of the Bank of England, Andrew Bailey, said: “Inflationary pressures have eased enough that we’ve been able to cut interest rates today.

“We need to make sure inflation stays low and be careful not to cut interest rates too quickly or by too much.”

Reacting to the news, people in West Bromwich told GB News they were disappointed by the decision.

One lady said: “Wow, that’s big of them! I’m sorry, but it’s not enough. It’s not bringing prices down at all.

“Alright savers prefer to have a higher interest rate, but you have got to look at those people who can’t save and people who can’t afford to put money aside.

“To just do 0.25 per cent? It’s a drop in the ocean for the Bank of England.”

Another person said: “I’m pleased we’re finally heading in the right direction, but I don't see how a change that small is going to make a difference.”

One of the biggest areas impacted by increased interest rates has been mortgages. It’s estimated 1.6 million homeowners have fixed-rate plans that will end this year, meaning they’ll have to re-mortgage at a higher rate.

Landlords will also be hit with higher fees when they come to re-fix their buy-to-let mortgages. According to Moneyfacts, a two-year fixed rate buy-to-let mortgage is on average about 5.46 per cent.

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Gurdip Singh, Mortgage Advisor and Founder of West Bromwich Money, says today’s decision by the Bank of England is “a move in the right direction”.

He told GB News: “It’s a great relief. Is it a little bit too late? Who knows, it’s a move in the right direction, however, we’re talking about a quarter of a per cent.

“High rates have had a massive impact on affordability with new buyers, their incomes are really being stretched in terms of what they can afford to borrow on the basis of high interest rates at the moment.

“For people coming off their fixed rates, there's shock and disbelief when they hear how much their payments are going to be, compared to how they were.”

A survey of Landlords by the National Residential Landlords Association found almost a third of landlords were looking to reduce their rental portfolios. Singh says this has a “double impact” on renters.

“There’s been a huge attack on landlords since the change in regulations to interest rate relief, and these interest rate hikes in the last couple of years have seen a lot of landlords already exit the market.

“That has a double impact on renters. It might sound like a positive thing, landlords leaving the market, but it’s not because what happens is they exit, the supply is brought down, and rents automatically go up.

“What we need to see is this trend [interest rate cuts] continuing so that landlords become more confident and grow the market again.”