Bank of England Base Rate Cut

The Bank of England today as widely reported cut base rate to 0.25% after a record low of 0.5% for seven years.  Todays cut may be an important psychological boost to markets and manufacturers but it is uncertain what impact it will have on house sales and mortgages.

Firstly it is not clear whether high street mortgage lenders will follow and cut their rates for you and I as most are under no compulsion to do so.

Secondly, the number of buyers with tracker mortgages that to some extent mirror the movement of the Bank of England base rate is far smaller than before, as increasing numbers of people have been opting for fixed rates while interest rates were at record lows.

Despite it’s uncertain effect on the housing market in the short term many commentators regard todays cut as almost inevitable.

“Markets don’t like surprises and everyone is expecting it.  The data worsened a lot since the last meeting so the expectation is – and I am pretty sure that the members of the Monetary Policy Committee will sit there and think… we’re going to have to” said Danny Blanchflower, a former MPC member, on BBC Radio this morning.

If you would like to see how your mortgage payments could be effected please feel free to get in touch with one of our free impartial mortgage advisers on 0333 358 3822