Ahead of the announcement, experts have given their thoughts on what the decision may be and its consequences for the economy and the UK property market.
Paul Hardy, managing director of LSL Estate Agency Franchising: “The Bank of England’s 0.25% base rate cut is a positive step for the property sector, reinforcing market confidence and potentially accelerating buyer activity. We’ve seen a steady recovery in interest from buyers this year, and with stock levels at a 13-year high, buyers now have plenty choice.
“As a national franchisor, we see regional variations across our network, and this rate cut could help balance demand – especially in areas like the south, where the stamp duty increase earlier in the year has had more impact. The interest rate drop is also encouraging for first-time buyers and those remortgaging, as lenders may respond with more competitive products.
“However, as ever, the market remains sensitive to wider economic pressures, particularly inflation and employment trends, the relatively poor performance of which have largely driven this rate change… so we’ll be monitoring closely to see how buyers respond over the coming weeks. Overall, this move aligns with our expectations for a more active and resilient property market heading into the final quarter of the year.”
HomeOwners Alliance: “Markets are putting the chance of a reduction this week at over 80%, with a further quarter point reduction expected before the end of the year.
“However, the Bank of England has a difficult balance to strike as it needs to support growth but also bring inflation under control. Inflation figures for June were higher than expected but at the same time the economy is slowing which makes the decision on whether to speed up or slow down the pace of cuts tougher.
“Thursday’s vote is likely to be split, with the MPC repeating its mantra that it is taking a ‘gradual and careful’ approach to cutting rates, and keeping its options open for future decisions.”
Harriet Guevara, chief savings officer at Nottingham Building Society: “With a rate cut now widely expected, this week could mark the start of a new chapter for interest rates, and for millions of savers and borrowers.
“For savers, base rate reductions tend to feed through into lower returns over time, so this is an important moment to lock in value where you can. Fixed-rate savings products, especially Cash ISAs, remain compelling while rates are still relatively strong. With further cuts likely on the horizon, it makes sense to act sooner rather than later.
“On the mortgage front, any reduction in the base rate could signal a gradual easing in the cost of borrowing. While we’re unlikely to see an immediate change in mortgage pricing, those coming to the end of fixed deals later this year may find better options opening up. Now is the time to review your finances and be ready to take advantage of changing conditions.”
Nicholas Mendes, mortgage technical manager and head of marketing, John Charcol: “This was the widely expected move – and it keeps the Bank of England on that ‘gradual and careful’ path they’ve been talking about for a while. The labour market is softening, businesses are pulling back on hiring, and the economy shrank in April and May. All signs point to a cooling economy but not one that’s falling off a cliff.
“A quarter-point cut won’t move the mortgage market dramatically, but it does keep the downward momentum going. Lenders are likely to trim rates further to stay competitive, especially with some already pricing in another cut before the end of the year.
“The Bank’s decision may give lenders more confidence to adjust pricing, but how far they go will depend on how stable the data looks from here.”
