Latest News: Bank of England Cuts Base Rate
The Bank of England has reduced interest rates to 4%, marking its fourth cut in under a year to its lowest level in 2 years. This decision follows a previous reduction in May.
The Bank of England has revised its economic growth forecast for 2025, now predicting a 1.25% expansion, slightly up from an earlier estimate. The impact of this rate cut will be felt across the financial landscape, potentially easing borrowing costs for mortgages and loans while simultaneously reducing returns for savers.
The decision is broadly seen as a positive step for the East Yorkshire housing market. Lower borrowing costs will improve affordability, providing a confidence boost for home buyers (especially first-time buyers) and those looking to remortgage.
The number UK home sales year to date is 7.5% up on 2024 (796k house sales YTD in 2025 vs 741k YTD in 2024). However, while sentiment may improve, the immediate effect on mortgage rates is expected to be gradual, as lenders have responded cautiously to the new environment.
Looking ahead, the trajectory of further interest rate reductions will depend on broader economic stability and especially inflation. Inflation remains a key factor influencing future interest rate policy and while it is expected to increase in the coming couple of months, it is hoped it will ease back as we get towards Christmas
For now, in the short-term, this latest rate cut will provide stability to [Grantham] property market confidence as it will benefit from improved affordability. Sustained medium-term growth will depend on the wider economic conditions.