
Base Rate Reduced To 5.00%
The Bank of England (BoE) has cut interest rates from 5.25% to 5%, marking the first reduction since the pandemic began. The decision was close, with the BoE’s monetary policy committee (MPC) voting five to four in favor of the cut.
Policymakers have been trying to manage inflation, which was in double digits from September 2022 to March 2023. Now that inflation is near the Bank’s target of 2%, they have finally decided it was time to lower rates, although they cautioned that rates won’t be dropping to very low levels again soon.
The MPC noted that the effects of past global disruptions have lessened, and there has been some progress in reducing long-term inflation risks. However, they stated that monetary policy needs to stay somewhat strict until these risks are more fully under control.
Market Reacts With Swap Rates Reduced
Mortgages Rates Are Sure To Follow
Financial markets have reacted positively to the Bank of England’s decision to lower interest rates to 5%. Following the announcement, swap rates, which influence the cost of fixed-rate mortgages, have fallen by around 0.2 – 0.3%.
This decline in swap rates suggests that mortgage lenders may soon reduce the mortgage rates they offer. Homebuyers and those looking to remortgage could benefit from lower monthly payments as lenders adjust their rates in response to the BoE’s decision.
Keep an eye on the market over the next few days as lenders are likely to announce new, more competitive mortgage rates. This is a great time to review your mortgage options and potentially secure a better deal.

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