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How Many More Bank Of England Base Rate Rises Will There Be In 2023?

As we head into 2023, the housing market is expected to see continued price falls, offering opportunities for those seeking first time buyer mortgages in Liverpool.


However, anyone considering a house purchase will need to weigh up various factors, not least the impact of the cost of living on them, as well as their own job security as Britain is expected to spend the whole year in a recession.


For those who can tick the ‘safe job’ box and whose income is not too strained, the remaining question is to weigh up the cost of buying against the level of repayments they may have on a mortgage, with the latest Bank of England Monetary Policy Committee (MPC) decision on the base rate being a 0.5 per cent increase to 3.5 per cent.


This was the third successive increase by 0.5 per cent, although not unanimous; six of the nine MPC members supported the move, with one voting for a 0.75 per cent rise and two wanting to hold the rate at three per cent.


A key question is whether there will be more rate increases to come over the course of 2023. While nobody can give a definitive answer at this point, there are factors that can give an indication of what may be likely, with the next decision due on February 2nd.


Firstly, the raising of interest rates to curb inflation is a policy the MPC pursued with determination in 2022 and the minutes of the December meeting said: “Should the economy evolve broadly in line with the November Monetary Policy Report projections, further increases in Bank Rate may be required for a sustainable return of inflation to target.”


The Consumer Prices Index rate did fall from 11.1 per cent in October to 10.7 per cent in November, but it appears it will need to fall faster in early 2023 to prevent more rate rises.


While a base rate of three per cent is nothing unusual historically, it does mean the cost of borrowing is much higher than in recent years, with the figure being set below one per cent from 2009 until this year.

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