The Bank of England is widely expected to cut base rate today, although experienced analysts say the possibility of a second cut this side of Christmas has been killed off by the Budget.

A poll of economists by Reuters suggests there will be a 0.25% cut in base rate today, which would take it to 4.75%.

However, since last Wednesday’s Budget gilt yields have increased sharply, increasing UK government borrowing costs and leading the markets to believe that the consequence of Rachel Reeves’ measures may be inflationary. 

This is why fewer analysts believe a second rate cut is likely before the end of 2024.

Meanwhile a group of economists working with the right-leaning think tank the Institute of Economic Affairs have called for use rate to be cut more aggressively today.

One of the group – Andrew Lilico – says:”The Bank is now claiming that inflation consistently undershooting its expectations is a surprise as inflation has fallen, just as it claimed it was a surprise when inflation consistently overshot the Bank’s expectations as it rose … The Bank should learn its lesson and pay more attention to movements in the money supply when such movements are large. For now, it should cut rates immediately to bring them back closer to a more neutral level. Tight policy serves no purpose at present.”

Ahead of this lunchtime’s decision, Rightmove has revealed that the average five-year fixed mortgage rate is now 4.66%, down from 5.33% a year ago.

The average two-year fixed mortgage rate is now 4.92%, down from 5.76% a year ago.

The portal also says the average monthly mortgage payment on a typical first-time buyer property when taking out an average five-year fixed, 85% loan-to-value mortgage, is now £1,093 per month, down from £1,159 per month a year ago.

And the average 85% LTV five-year fixed mortgage rate is now 4.69%, down from 5.40% a year ago, while the average 60% LTV five-year fixed mortgage rate is now 4.05%, down from 4.91% a year ago.