The Bank of England will almost certainly cut interest rates tomorrow in what would be a welcome move for property buyers and sellers, as well as estate agents.

A slowdown in business activity in October revealed in yesterday’s final S&P Global UK Composite PMI survey suggested a degree of uncertainty ahead of the budget. The index fell from 52.5 to 51.8, its lowest reading since November last year. But economists still expect interest rates to be cut by 0.25%, from 5% to 4.75%, when the Bank’s Monetary Policy Committee (MPC) meet tomorrow.

UK estate agents have reported more buyer interest since summer following the BoE rate cut in August, with buyer enquiries increasing significantly in recent weeks.

The Bank cut interest rates from 5.25% to 5% in August, which was the first drop in more than four years.

UK inflation fell to 1.7% in the year to September, the lowest rate since April 2021.

The drop in the rate was larger than expected thanks in part to lower airfares and petrol prices – economists had predicted a 1.9% fall.

It also means inflation is now below the Bank of England’s 2% target, paving the way for interest rates to be cut further next week.

Financial markets have been pricing in a interest rate cut for the UK at the next Bank of England tomorrow, with all 72 economist in a Reuters poll taken 22-28 October forecasting that BoE will cut its Bank Rate by a quarter-point next week to 4.75%.

But while the Bank is facing growing pressure to also cut interest rates in December as wage growth slows, almost near-two-thirds of respondents expect no interest rate move in December, suggesting the BoE will stick to a cautious approach.

Among 16 gilt-edged market makers, a majority of 11 expected the MPC to hold rates in December, while five expected a cut. Interest rate futures are pricing in reductions in both November and December.