Wed, 07 May 2025

Wed, 07 May 2025 When will interest rates go down again?

Interest rates, set by the Bank of England, affect mortgage, loan and savings rates for millions.

* The Bank of England is expected to cut interest rates on Thursday, with further falls predicted for the rest of the year.
* Interest rates affect mortgage, credit card, and savings rates for millions of people.
* The current base rate is 4.5%, down from a peak of 11.1% in October 2022.
* Inflation has fallen to 2.6%, but remains above the target of 2%.
* Some analysts predict interest rates could fall to 3.5%.
* Mortgages: + Almost a third of households have a mortgage, with around 600,000 tracking the base rate. + However, most mortgages are fixed-rate deals, which aren't immediately affected by rate changes. + As of May, the average two-year fixed mortgage rate was 5.16%.
* Credit cards and loans: Bank of England interest rates influence lending rates for credit cards and loans.
* Savings: A falling base rate is likely to reduce returns on easy access accounts, which currently offer an average 3% a year.
* The UK has secured its biggest post-Brexit trade deal with India, but the impact on interest rates remains uncertain.
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