UK borrowing costs are set to be cut this week in what could be the first of multiple interest rate cuts in 2025.
Pressure is increasing on the Bank of England to resume cutting interest rates amid growing economic concerns.
Policymakers are expected to announce a reduction in interest rates on Thursday, from 4.75% to 4.5%, with markets pricing in an 84% chance of this cut. The decision comes as inflation slows and the UK economy shows signs of stagnation.
Susannah Streeter, head of money and markets, Hargreaves Lansdown, told the press: “The scene has been set for a rate cut next week, with December’s dip in inflation and the flatlining economy taking centre stage.
“Three policymakers wanted to see a rate cut at the last meeting to boost growth, and it’s looking highly likely that more will follow their lead next Thursday and vote for a reduction.”
For homeowners with variable or tracker-rate mortgages, a rate cut could lead to lower monthly repayments. However, the effects may not be immediate or as significant as some expect.
“If you’re on a fixed-rate mortgage, the rate cut won’t affect you immediately because it’s already priced into the market,” said Sarah Coles, head of personal finance at Hargreaves Lansdown.
Read the orginal article: https://propertyindustryeye.com/bank-of-england-set-to-cut-interest-rates-this-week/
