For mortgage holders, now is the time to review your deal and decide whether to fix or go variable. For savers, locking into fixed-rate bonds before further cuts protects your returns. For borrowers, focus on paying down expensive debt and wait until mid-2025 for better loan rates if possible. The key is to act now—rate cuts create both opportunities and risks, and those who plan ahead will benefit most.
Key takeaways
- The Bank of England cut the base rate to 4.75% in November 2024 and is expected to make further cuts in 2025 as inflation falls toward the 2% target
- Mortgage holders on variable and tracker rates will see immediate payment reductions, while fixed-rate holders must wait until their deal ends
- Savers will see returns on easy-access accounts fall, but fixed-rate bonds locked in at higher rates will maintain their returns
- The BoE must balance supporting economic growth with ensuring inflation remains under control
- Markets expect the base rate to fall to around 3.5-4% by the end of 2025
Sources
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