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Bank set to cut interest rates in boost for mortgage holders

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23/082022 Construction scenes at Kilcarbery Grange, Clondalkin, Dublin. Kilcarbery Grange in Clondalkin is a large-scale development that will consist of 1034 new homes on completion. The first phase of the development will see 301 homes delivered, of which 74 are being allocated as affordable apartments under the new Cost Rental Equity Loan (CREL) Scheme. These homes have been delivered through funding provided under the Government's Cost Rental Equity Loan (CREL) scheme and private finance from the Housing Finance Agency Tuath Housing now manages over 8,500 homes nationwide. All 8,500 homes have been delivered in partnership with Local Authorities across the country. These 8,500 homes provide long term, safe, secure and affordable housing for over 23,000 people. PHOTO:Gareth Chaney/ Collins Photos

Bank votes to cut borrowing costs but also slashes short-term growth forecasts

St Andrews Development PIC SHOWS the new houses on the estate
Mortgage interest rate drop for West Dunbarton home owners.

The Bank of England has cut the interest rate from 4.75 per cent to 4.5 per cent in its monthly announcement, but has slashed short-term growth forecasts for the economy.

Governor Andrew Bailey said the cut would be “welcome news to many” but that the Bank was “monitoring the UK economy and global developments very closely, and taking a gradual and careful approach to reducing rates further”.

The base rate helps dictate the cost of borrowing such as taking out a mortgage, with some products, particularly tracker mortgages, following it.

But after the rate rose as high as 5.25 per cent in late 2023, there is an indication it will continue to fall, especially after inflation unexpectedly fell to 2.5 per cent in December.

With economic growth stagnating across the UK, many believe the Bank will make another interest rate cut to encourage more spending and stimulate the economy.

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