The Bank of England has held the base rate at 5.25%.

Many expected the Bank’s Monetary Policy Committee (MPC) to raise rates by 0.25% one final time at today’s meeting but the majority of members voted to hold them, following the last rise on 3 August.

The vote was close, with five in favour, four against.

The MPC meeting minutes said the decision was made as inflation had fallen much faster than expected, to 6.7% and that higher rates were “starting to hurt the economy.”

Primis proposition director Vikki Jefferies says the decision will be “a relief for borrowers”.

“This should accelerate the price war, which has seen mortgage providers lower mortgage rates to stay competitive in recent weeks, with fixed mortgage rates dropping below 5% in some cases,” says Jefferies.

BSA head of savings and economics Andrew Gall agrees.

“Mortgage borrowers are likely to breathe a collective sigh of relief that the Bank Rate is unchanged, after 14 consecutive rises.

“However, for first-time buyers the higher cost of a mortgage compared to two years ago, alongside the increased prices for energy, food and other items, will have a considerable impact on what they can borrow. They may need to lower their ambitions about the property they would like to buy as they are unlikely to be able to borrow at the level they might have achieved before the Bank Rate started to rise in December 2021.”