Bank of England Cuts Base Rate to 4.25%

Today, the Bank of England (BoE) cut the base interest rate to 4.25%, delivering a boost for borrowers. The quarter-point rate cut is the second of 2025, with more expected to follow later this year.

Bank of England Cuts Base Rate to 4.25%
Looking forward
Financial forecasters predict interest rates will continue to fall due to several deflationary factors.
The first is the falling price of oil (it’s currently at a four-year low).
Then there’s Trump’s tariff war. This could see China re-route goods to other consumer markets, such as the UK, further pushing down prices here. (Although let’s face it, no one’s really sure what the final shape of this policy will be.)
Morgan Stanley predicts the base rate could hit 3.25% by the end of 2025 and reach 2.75% by mid-2026.

Impact on mortgage rates
The BoE base rate influences the interest rate banks and building societies offer savers and borrowers.
So, while today’s decision won’t be music to the ears of savers, it’s a different story for mortgage holders or those looking to buy property.
Those on tracker rates should immediately notice the difference in their monthly payments.
Homeowners on fixed rates will benefit from lower rates when they come to renew their deal.
And people planning to invest in property should be able to negotiate a more affordable mortgage.
Acting in anticipation of today’s cut, HSBC dropped its rates last week so that all its products now fall below 5% for the first time since 2022.
Buyers with substantial deposits may be able to secure a deal at below 4%.

Market activity
In general, lower interest rates boost activity in the property sector.
It makes borrowing more affordable for buyers, increasing the number of players in the market. This, in turn, means a larger pool of potential buyers for sellers to choose from, driving up competition (and often value).
If you’re looking to buy or sell in the coming months, contact us. We’re here to help.

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  Hello, my name is Abigail, and I am the Grey in Grey & Co. I started working here in 2002 as a Junior Negotiator and have worked my way up the ranks since then. I took over running the company in 2014 and have been enjoying the roller coaster that is leadership ever since.   During my 20 plus years at Grey & Co I have dealt with the sale of over £100,000,000 worth of property and overseen the management of assets worth £250,000,000 for clients around the world.   I also had the pleasure of working with my father, the founder of Grey & Co, for 15 years before he sadly passed away and from him, I learnt the work hard ethic and our values today are still the ones that he founded the company on all those years ago.   Be Remarkable, Be Passionate, Be Humble and Be Better.   As a community centric boutique family agency, you couldn’t find a better partner to take with you on your property journey.

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