The Bank of England opted to raise the base rate by 0.25 basis points to 4.25%.

The decision on whether to hold interest rates at 4% to support the economy during a developing banking crisis or raise interest rates to combat inflation had been on a knife edge until Wednesday. That’s when official figures revealed that the UK's annual rate of inflation accelerated unexpectedly to 10.4% in February, up from 10.1% a month earlier.

It’s clear that the Bank of England will continue to prioritise bringing inflation back to its 2% target despite the uncertain outlook, which raises the probability that there may be at least one further hike before the current round of tightening peaks.

At least two major lenders have increased mortgage rates on various products this past month and today's decision means that they are unlikely to be the last. Swap rates, instruments used by the banks to price mortgages, have been moving up since Wednesday's hot inflation reading. In the absence of meaningful data suggesting that rising prices are easing more quickly, then the trend for mortgage rates looks clear.

That is not to say we are expecting spikes in mortgage rates akin to those we saw after the mini budget. The mortgage market is likely to be much more stable over the medium-term, however it's now more likely that several weeks of easing mortgage rates has bottomed out and those considering fixing should lock in a deal. Most can be renegotiated should conditions move in the other direction.

If you are looking to purchase a property or remortgage this year and would like to discuss your options, please get in touch. We have access to over 200 lenders, and can help find the most suitable and cost-effective mortgage for you.