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Jo Carrasco, Business Partnerships Director at Stonebridge, comments on the Bank of England’s rate decision this afternoon:
“Today’s rate cut sends a clear signal that the Monetary Policy Committee believes the greater risk now lies in a faltering economy rather than entrenched inflation.
“While inflation remains nearly double the Bank of England’s target, the balance has shifted. Wage growth is easing, the labour market is softening, and GDP data shows the economy retracted in May. Meanwhile, the Bank appears increasingly confident that inflation will roll back next year, creating room to begin loosening policy.
“Unless the economic outlook improves significantly, we expect at least one further cut before the end of the year, providing relief for borrowers on variable-rate mortgages.
“It could also accelerate the downward trend in fixed mortgage pricing. Sub-4% deals are already widespread, supported by falling swap rates and intense competition among lenders.
“Stonebridge’s latest Mortgage Market Briefing, which offers a snapshot of activity in the mortgage market, showed that the average borrower is already £890 better off than they were a year ago, thanks to falling rates. If today’s cut reduces funding costs further, borrowers should see further savings in the weeks ahead.
“For advisers, staying close to their customers and proactively demonstrating the value of their professional advice must continue to be their priority.”
