Bank of England MPC meeting November 3rd 2022 - what are your predictions and how are you preparing

PK_London

The next BOE MPC meeting is in two weeks time. Speculation is that base rates will rise even further which are likely to push up mortgage rates. What are your predictions and how are you preparing for any rate rises?

https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2022/november-2022

RobM99

No mortgage or rent here so I'm hoping savings rates will zoom up!

Troy_af

And just a few days ago someone posted a MSE article saying that interest rates are expected to drop over the next few weeks, as did my broker, which is why I was advised to not apply for a new mortgage just yet.

I really don't think there is any point any more in asking for anybody's predictions because it is quite clear to me now that absolutely nobody, not even the so called "experts" have the slightest of clues as to what on earth is going on or what is going to happen.

This is how Ive decided to deal with it. I should be completing on a purchase within the next few months, with 8 properties in the chain. Ive already decided that if rates go up again and my offer expires for a third time, then I will be pulling out. The chain will probably collapse as a result. What an absolute mess!

PK_London

I think there is some predictability. Before the mini budget base rate was 2.25% and you could get a mortgage at 4.25%. Then after the political turmoil that gapped up to 6.25%. I think we could see a rise of 1% in November but I expect a lot of that has already been priced in so I don't think mortgage rates will jump a full 1%. I do hope savings rate rise a full 1% or more as a lot of these are fixed deals and rates are likely to continue rising until next summer.

Fingers crossed on your chain. That does sound horribly long. I myself just completed on a shorter one but it was touch and go until the very end!

Scorpio33

My prediction:

Rates will go up 1% November, but no/little change in mortgage rates.

From what I have seen and heard from various people, I think mortgage rates will peak at 6.5% early 2023, then slowly decline to 4-5% over 2023. 

Lots of it depends on political stability as well as the war in Ukraine, which is impossible to predict at the moment though.

km0193

Deputy BOE Governor- has just said that it's not a certainty that rates will rise as fast and high as has been predicted in the markets. 

Seems like the first real tangible piece of good news for a while 

Sg28

The BOE lacks the guts to get inflation under control so I would say a 0.5% increase.

RelievedSheff

For what it is worth I think the BOE will raise interest rates by 0.75% to 3% in November.

I don't think that mortgage rates will follow suit though. The rate rise seems to already be factored into their mortgage rates at the moment.

For us it will make little difference. We are in the fortunate position to be on a fixed rate until June 2026.

PK_London

Scorpio33 said:

My prediction:

Rates will go up 1% November, but no/little change in mortgage rates.

From what I have seen and heard from various people, I think mortgage rates will peak at 6.5% early 2023, then slowly decline to 4-5% over 2023. 

Lots of it depends on political stability as well as the war in Ukraine, which is impossible to predict at the moment though.

I think you're pretty much spot on. I think mortgage rates may rise a little but not the full rate. Its established now that mortgage rates are not as rigidly tied to the base rates. The swap rates may also drastically improve if we see a full 1%. The banks have artificially raised their rates to put off new applications as they are currently swamped. Once those volumes ease and I think they will go back to being more competitive.

With that said, I think base rates will increase by a 0.75-1.00% and mortgage rates will remain about the same.

AdmanPea

So I have two loans one up may next year the other November. I am fixed with an average rate of about 2.9% between the two at the minute. If I pay to opt out it’s about £2400 to early exit then lock in for three years at 3.69%….

Or I wait it out and see.

Thoughts? My initial plan was wait until both loans line up November next year then remortgage but if rates go to 6% and market dips in house value then I’ll be worse off over three years. But it’s all a gamble! 

Stress! 

Cheesy77

Scorpio33 said:

My prediction:

Rates will go up 1% November, but no/little change in mortgage rates.

From what I have seen and heard from various people, I think mortgage rates will peak at 6.5% early 2023, then slowly decline to 4-5% over 2023. 

Lots of it depends on political stability as well as the war in Ukraine, which is impossible to predict at the moment though.

Agreed but think they'll go for 0.75% personally.

But this should not lead to any further rises in mortgage rates. Banks have already priced in an expectation of significant rises in base rate over the coming months. No way should the average 2 year fix be at 6.5% now on a base rate of 2.25% without a clear expectation from the lenders of further rises coming