Easy Street Financial Services 9 Interest Rates 9 July Update – Interest Rates
July Update – Interest Rates
July 19, 2024

The Bank of England Base Rate remained unchanged at 5.25% at the last meeting. 

Many felt that it was unlikely that there would be a cut, regardless of the usual factors, because of the desire to remain neutral during the General Election.

However, the latest inflation data shows that it has held firm at 2%. This will renew calls for a reduction in the Base Rate at some point in the near future.

Although some feel that this will be unlikely during the next meeting, it will be on the agenda if inflation continues to remain lower.

As far as mortgages and the economy are concerned, even a minor reduction could have a major impact in terms of symbolism and confidence.

Mortgage Rates

The good news is that mortgage fixed rates have been reducing over the last month.

Major lenders including HSBC, Barclays, Natwest, Halifax and Satnander have also reduced their rates with Nationwide reducing rates by up to 0.3%.

Reports suggest that volatile swap rates could lead to further reductions in the coming weeks, although this is only speculation.

Our Thoughts

It’s good to see that mortgage fixed rates are reducing, especially as it was confusing to many as to why they were increasing in the first place (see our previous blogs which includes a brief explanation of swap rates).

Some house price reports have reported a small drop in asking prices. Factors could include mortgage rates increasing, affordability issues and the desire to try and secure a sale before the summer holiday period.

Either way, based on this data, if asking prices and mortgage rates reduce, this could lead to an increase in activity levels in the near future.

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