The Bank of England could move more aggressively to lower borrowing costs this year, which is good news for mortgage borrowers.

According to a new survey of 51 economists, the Bank of England is expected to cut interest rates at least four times this year.

The poll suggests the base rate could fall from its existing 4.75% to 3.75% or lower in 2025, with a majority of respondents forecasting four quarter-point reductions to support the UK’s slowing economic growth.

The findings go beyond the two rate cuts currently priced in by financial markets for 2025, while 15% of those surveyed believe rates will drop to 3.5%, with three economists predicting cuts to 3.25%.

Policymakers will be under pressure to balance concerns about sluggish economic growth, with most economists expecting inflation to remain between 2.5% and 3.5%.

More than a third – 37% – of respondents cite wage increases as the single biggest factor driving inflation.

Andrew Sentance, a former member of the Bank’s monetary policy committee, noted that “pay rises of 3-4% still mean labour costs rising by about 6 per cent once the NI rise is added in”.

The Bank’s vote last month led to a split committee, with three members favouring a rate cut to 4.5%, while the remaining six supported holding at 4.75%.

Multiple interest rate cuts this year would be a welcome boost to mortgage borrowers, who have faced a sharp rise in costs after interest rates were raised to 5.25% to combat inflation which surged to 11.1% in October 2022.

Property industry reacts to Bank of England’s interest rate decision