Bank of England cuts interest rates to 4.75%
The prevailing economic conditions were clearly viewed as a Goldilocks moment to cut rates.
7th November 2024 12:12
by Myron Jobson from interactive investor
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Myron Jobson, Senior Personal Finance Analyst at interactive investor, says: “With the war against inflation seemingly won, as the headline rate fell to 1.7% in September after hovering around the target 2% mark since April, and economic growth remaining sluggish, the prevailing economic conditions were clearly viewed as a Goldilocks moment to cut rates by the Bank of England.
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“Political uncertainty over what Donald Trump’s plans to impose tariffs during his presidency and one of the most radical Budgets in recent history mean for inflation clouds the outlook for interest rates going forward. The Bank of England could choose to reduce interest rates at a much more measured pace, which could result in a laboured transition from a high to a lower interest rate environment.
“There has been a reprieve in mortgage rates in recent months due to expectations of further cuts to interest rates as well as a fierce mortgage price war among lenders. Mortgage rates could fall further following the latest cut, offering additional relief for those in the market for a home loan to get on or climb up the property ladder.
“The opposite is likely to be true for savers. Savings rates have seen little change in recent weeks, but the overall trend has been downwards since the start of the year in anticipation of the Bank of England lowering rates in the future.
“Falling interest rates present an opportunity to revisit and adjust your savings strategy. The simple message is to act quickly to secure the best savings deals before they are gone. The best savings rates are seemingly on borrowed time.”
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