Phoebus comments on MPC's interest rate decision

08 May 2025

Richard Pike, chief sales and marketing officer at Phoebus Software says:

“The Bank of England’s decision to cut the base rate is not unexpected and reflects growing concerns around slower economic growth and trying to ease inflationary pressures. For the mortgage market, the big question is how this move affects swap rates, which had already been trending down in anticipation of today’s announcement. If we see sustained downward movement in swaps, lenders may begin pricing more competitively in the coming weeks, particularly in the fixed-rate space.

"However, geopolitical factors such as the recent announcement of US tariffs by Donald Trump have injected volatility into global markets and inflation forecasts, which in turn could limit how far UK rates fall in the medium term. The industry will need to remain agile in response to both monetary policy shifts and wider economic turbulence.”