Frances Haque, Chief Economist at Santander UK responds to the Bank of England's base rate announcement

18 December 2025

Frances Haque, Chief Economist at Santander UK:

"Today’s cut brings positive news for homeowners - and the market itself has already felt some of that relief, with swap rates coming down and the effective interest rate on newly drawn mortgages falling for the eighth consecutive month in October, according to recent Bank of England data. This, paired with a slight dip in house prices and continuing real wage growth, means we should see a healthy rise in market activity to start the new year."

"Moving into 2026, further cuts are likely - assuming inflation and wage growth meet the Bank of England’s expectations. Although, the timing of those cuts remains uncertain and will depend on the loosening of the labour market, economic growth prospects, as well as the MPC's collective view on whether Bank Rate is above or below the so-called ‘neutral’ rate. As we move closer to the neutral range next year, the evidence required for further cuts will become stronger.”