The Bank of England’s Monetary Policy Committee (MPC) has reduced the Bank Rate by 0.25 percentage points, to 4.75%.
The MPC voted by a majority of 8–1 for the reaction, while one member, Catherine L Mann, wanted to maintain Bank Rate at 5%.
“The MPC has felt comfortable providing what will be welcome news for mortgage borrowers”
Rob Clifford, chief executive of mortgage and protection network, Stonebridge, said: “As expected, rate setters have opted for a fresh cut. This comes despite last week’s budget, which the OBR cautioned would raise inflation and potentially rates.
“It is also despite fears the victory of Trump in the US presidential election could lead to renewed global inflationary pressures, thanks to the President-elect’s views on tax cuts and import tariff hikes.
“Any arrival of tax cuts and trade tariffs in the US economy will have potentially profound implications for markets, and this will feed directly into the Bank’s future thinking as it looks to continue curbing any renewal of inflation.
“However, with inflation currently below its 2% target, the MPC has felt comfortable providing what will be welcome news for mortgage borrowers. As ever, regardless of market conditions, mortgage hunters should seek professional advice and benefit from the expertise of a broker.”
“We shouldn’t expect a massive change in fixed mortgage rates than those already planned by lenders”
Richard Pike, chief sales and marketing officer at Phoebus Software, said: “Following the UK Budget and the US election result, overall, the markets are reacting positively. Coupled with lower-than-expected inflation figures last month, today’s Rate cut is not unexpected and means we can look forward to a strong finish to the year.
“We shouldn’t expect a massive change in fixed mortgage rates than those already planned by lenders, and with inflation looking like it will rise again moving into 2025, another cut in December is looking more unlikely.
“With such a constantly evolving economic picture, consumers may continue to struggle on product choice, but with more choice continually coming to market this shouldn’t affect gross mortgage lending figures moving forward.”
MORE CUTS NEEDED
Jamie Pritchard, managing director of sales at residential lender Glenhawk, added: “Despite last week’s unnerving Budget, the MPC needs to persevere with an aggressive rate cut programme. Given the current macroeconomic trajectory, the target should be a minimum of three further rate cuts by next Summer, bringing the base rate down to 3.75%.
“With wage growth having cooled more than expected and the very real possibility of deflation kicking in, the MPC has the means to give the economy the support it needs. House prices have continued to surge, although the new stamp duty surcharge is likely to pressurise buy-to-let transactions, and cheaper financing will be critical in helping bring forward the supply that is necessary across the country.”
