Fixed rates could fall even if the Bank of England raises interest rates

Fixed rates could fall even if the Bank of England raises interest rates today (Image: Getty) In somewhat encouraging news following weeks of volatility, brokers have said fixed mortgage  rates could fall even if the Bank of England raises its Base Rate today. Successive Bank of England Base Rate rises have sent mortgage rates rocketing since the start of last year and with a two-year fix currently averaging 6.88 percent, concerns have been brewing about what another Base Rate rise might bring. A number of brokers shared their views on  newspage.media  ahead of the Bank’s announcement later today and despite a widely expected Base Rate rise of 0.25 percent, many predict there will be ‘no movement’ in fixed rates. Lewis Shaw, the owner of Mansfield-based  Shaw Financial Services , wrote: ‘Regardless of what the Bank of England does tomorrow, there will be no movement in fixed rate mortgage pricing because this has already been baked in.’ Echoing the sentiment, Craig Fish, managing director at London-based mortgage broker  Lodestone  said: ‘The Monetary Policy Committee is fully expected to increase rates by at least 0.25 percent on Thursday, but this will have no impact on the fixed rates that are available. Most fixed rates on offer right now already have a rate rise factored into them.’ The Bank of England has raised the Base Rate 13 times since December 2023 (Image: EXPRESS) However, he noted one factor that may impact rates is the release of the inflation data on August 16 and what that does to SWAP rates. He said SWAP rates influence mortgage pricing and if, ‘as expected’, inflation falls, then he suspects more lenders may continue to lower rates as we have seen over the past week. Darryl Dhoffer, founder of Bedford-based  The Mortgage Expert , also stressed the significance of the inflation data, saying: ‘Looking at the past two weeks, two-year and five-year SWAP rates, which influence the pricing of two-year and five-year mortgages, have largely remained steady, which implies that lenders have already priced in any rises in fixed rates. He added: ‘I would not expect the majority of lenders to reprice any fixed rates until the next release of inflation figures on August 16.’ However, some did point out that, in the instance that the Base Rate rises by 0.5 percent today, we could see mortgage rates ‘start to rise’ again. Elliott Culley, director at Hayling Island-based  Switch Mortgage Finance  said: ‘If the Base Rate rises by 0.5 percent or the minutes suggest the Base Rate will still need to rise as high as 6.5 percent, we could see mortgage rates starting to rise again.” Peter Stamford, director of Alston-based  Moor Mortgages  mirrored Mr Culley’s views, saying: “A 0.25 percent hike by the Bank of England may merely ripple the mortgage pond, but a 0.5 percent increase could create waves, stirring up the lending waters. ‘[Today] is a big day for borrowers and the country in general.’ The Bank of England will announce its decision to raise the Base Rate from five percent today (Thursday, August 3), at around midday.