Bank of England cuts base rate by 0.25%

Wed 13 Nov 2024

In a move that has been welcomed by the property industry, the Bank of England’s Monetary Policy Committee has voted by a substantial majority to reduce the Bank Rate from 5% to 4.75%.

With inflation running at 1.7%, well below the Bank’s 2% target at 1.7%, and wage growth at a 2-year low, the reduction was widely expected by the money markets.

It means lenders have mostly priced in the cut into their mortgage rates but the more than one million borrowers on tracker and variable deals will see more immediate falls in their monthly bills.

The reduction should also give buyers a significant confidence boost as, together with the 0.25% fall in August, it points to an ongoing trend.

The Committee’s briefing papers with the announcement add: “There has been continued progress in disinflation, particularly as previous external shocks have abated, although remaining domestic inflationary pressures are resolving more slowly.

“Based on the evolving evidence, a gradual approach to removing policy restraint remains appropriate. Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further.”