x
By using this website, you agree to our use of cookies to enhance your experience.
STAY CONNECTED!
    
newsletter-button

TODAY'S OTHER NEWS

Bank of England leaves interest rates unchanged, but could cut in November

The Bank of England, as expected, opted to leave UK interest rates unchanged at 0.25% yesterday in the wake of recent upbeat economic data, but admits that another cut is still a possibility before the end of the year.

Last month the Bank halved its bank rate from 0.5% - the first rate cut since 2009 - as it tried to ward off a Brexit-fuelled recession. But the Bank said that it might cut rates further in the coming months, even though the near-term economic activity have been somewhat stronger than expected following the outcome of the EU vote.

Economists predict that the Bank of England is likely to announce a further cut to the base rate in November, bringing it down from 0.25% to just 0.1%.

“Whilst the base rate has been held as predicted, it is fair to say we can watch this space for further fiscal intervention in the weeks and months ahead,” said Simon Checkley, managing director of Private Finance. “What is becoming apparent is that despite rates being at an all-time low, they cannot be relied upon solely as the means by which to secure economic growth.”

He added: “With finance being so cost effective at present, there are also ample opportunities to be taken advantage of; particularly for first-time buyers and buy-to-let investors.”

Mortgage borrowing rates are currently at an all-time low with lenders across the board continuing to shave percentage points off their best deals in an effort to attract greater business from those buying or remortgage property.

Santander, Virgin Money, Nationwide, NatWest, TSB are among the main lenders to have slashed rates in recent days, but many experts are now suggesting that it is unlikely that mortgage rates will fall much further, as lenders look set to sustain existing rates, or possibly even increase pricing to boost profits.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, last week reported that the anticipated reduction in the base rate in November has already been factored in to most mortgage lenders’ pricing.

He said: “The rates that banks can borrow at in the wholesale market have been at record lows for a while now.

“Instead of seeing lenders cut rates, we are actually seeing them widen their spreads and I think it's likely we’ll see that process continue, meaning mortgage rates aren’t going to be materially different at the end of the year from now.”

icon

Please login to comment

Zero Deposit Zero Deposit Zero Deposit
sign up