The Bank of England voted to keep rates at 4.75% at their latest meeting having reduced it by 0.25% in November. Although some weeks ago, many were predicting and hoping for a further reduction, this decision didn’t come as a surprise given the latest inflation data and other economic factors.

Generally, many are predicting the rate to reduce throughout 2025. Depending on the source, predictions are that they could reduce by between 0.75% – 1.25% by late 2025 to early 2026.

Mortgage Rates

It’s been an interesting month or so for mortgage rates.

Since the Autumn budget, mortgage rates have generally been increasing. This was a surprise given that the base rate had actually reduced during this time. However, although there is a link, mortgage fixed rates move independently to the bank of england base rate.

The good news is that in recent weeks, many lenders have been reducing their mortgage rates. Again, given that the base rate stayed at 4.75%, this illustrates that mortgage fixed rates move independently.

Some mortgage industry experts believe that a rate war could be coming that will drive rates back down to sub 4% levels.

For anyone who is looking to borrow next year, this makes welcome reading. This is especially the case for those who need to remortgage and are coming to the end of their low 5 year fixed rate