Bank Rate cut to 4%

Yesterday, those fine folks who make up the Bank of England’s Monetary Policy Committee (MPC) voted to cut bank rate to 4%, a level last seen in early 2023. Behind this move? A cooling economy, rising unemployment, and inflation that’s still hanging around like a guest who simply won’t take the hint.

Market Commentators are split (much like the Bank’s own Monetary Policy Committee). Some are urging caution, wary of inflation’s staying power, while others are firmly in the “cut now, ask questions later” camp. Most forecasts suggest we’ll see at least one more cut before the end of the year, taking the base rate down to 3.75%. Though a few are feeling bolder and pointing to 3.5%. Either way, it looks like borrowers might get a little breathing space.

Further out, the experts at the Office for Budget Responsibility expect a gentle glide down to around 3.8% by mid-2026. Nothing dramatic, just a slow shuffle toward something resembling normality (whatever that is). The Bank is likely to tread carefully, juggling inflation risks with the need to give the economy a bit of TLC. So, while the days of emergency low rates aren’t returning anytime soon, it does look like we’re moving toward a slightly more comfortable spot for borrowers. Cautiously, of course, with no sudden movements.

While it’s always interesting to see what the Bank of England might do next, the truth is that your own financial situation invariably doesn’t follow the same script as the headlines. That’s where we come in. Whether rates rise, fall, or (this would be fun) do the hokey cokey, we’re here to help you make sense of it all and guide you through what it means for your plans. Staying in touch means we can help you navigate whatever comes next.