Interest rates have been increased to 4% by the Bank of England today but gave reassuring comments that borrowing costs may be at their peak although this won't be as good news for those seeking to re-mortgage or in need of a loan in the coming months and it may be some time before we see a lower mortgage rate.
This is the tenth consecutive interest rate rise by the Bank, but the accompanying documentation seems to hint that there could be a chance that it might not raise rates further, saying that it would only raise rates further "if there were to be evidence of more persistent pressures".
According to those forecasts, inflation has now peaked and it is expected to come down gradually this year and next, so eventually it will fall below the Bank's target of 2%.
In raising interest rates again, the Bank pointed to wages in the private sector rising faster than anticipated.
Seven members of the nine-person Monetary Policy Committee supported the half percentage point increase, while two members - Swati Dhingra and Silvana Tenreyro - voted to leave borrowing costs on hold.
Now it says further increases may be needed if the economy behaves as it did previously, but it says these rises are dependent on higher inflation than previously predicted.
This might suggest some small further increases in borrowing costs but provides hints that UK interest rates are now at their peak.
While the outlook for the UK economy is better than in the Bank's previous forecasts, it is still weaker than in recent years.
The average UK growth rate pre-financial crisis was around 2.5% and around 1.5% post-pandemic, the Bank expects underlying growth of just 0.7% in the coming years.
The bank now expects that the size of the economy will still be at 2019 levels in 2026 - a full seven years of lost growth.
A spokesperson for the prime minister commenting on the figures said: "This is a difficult time for mortgage holders in the UK. Inflation falling is not a given, it requires government to stick to the difficult decisions it has taken."
On the subject of mortgage rates, Mr Bailey said that he was "hoping that we’ll see much more stability in the interest rate curve off of which mortgages are priced off."
