UK borrowing costs are set to be cut today for the second time this year, despite tax changes and a Donald Trump victory in the US casting uncertainty over the future path of interest rates.
Most economists think policymakers at the Bank of England will opt to reduce interest rates at lunch time to 4.75%.
Rates currently sit at 5% after being cut by 0.25% in August, the first reduction since 2020, then kept the same in September.
Since then, the latest official data showed UK Consumer Prices Index (CPI) inflation fell to 1.7% in September, the lowest level since April 2021.
The slowdown, from 2.2% in August, was driven by a sharp slump in petrol prices and lower airfares.
Some analysts predict that inflation falling below the Bank’s 2% target level will encourage policymakers to continue easing interest rates, releasing some more pressure on borrowers and mortgage holders across the UK.
| Ahead of the Bank of England’s Bank Rate decision today, UK Finance has provided fresh data that includes information on the total number of mortgages and figures on what a change in Bank Rate would do to average monthly mortgage costs. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Residential mortgages outstanding This table shows the split of mortgages across fixed rates, trackers and standard variable rates.
Of the total number of fixed rate deals, UK Finance analysis shows that around 1.8 million will end next year. Further analysis This table shows average monthly payments and interest rates for various different mortgage types.
Rate change scenarios (change from current monthly payment) This table shows what would happen to average monthly payments for tracker and standard variable rate mortgages if the Bank of England changes interest rates. Those on fixed rate mortgages will see no changes to their monthly payments.
|
Interest rate cut tomorrow is looking nailed on, say economists