There’s growing confidence amongst analysts about Bank of England interest rate falls following the latest inflation figures. 

Inflation slowed to 2.6% in the year to March, according to the Office for National Statistics, and marks the second month in a row that the rate at which prices are rising has eased.

Nathan Emerson, chief executive at Propertymark, comments: “The overall question remains as to how much of an impact this drop in inflation will influence the Bank of England’s decision to potentially cut interest rates. If any decision to cut the base rate happens within the forthcoming months, this should hopefully lead to a variety of more competitive mortgage deals hitting the market and potentially inspire further market activity at a time when the economy urgently needs growth to help balance the country’s overall financial prospects.”  

But Sarah Coles of business consultancy Hargreaves Lansdown is more confident of cuts and says: “Once the price rises of Awful April kick in, we can expect [inflation] to accelerate sharply again. The Bank of England has forecast that it’ll hit around 3.75% in the third quarter of 2025 … The global economic turmoil caused by Trump’s tariffs mean it’s difficult to predict exactly where inflation is going to take us in the near future. However, prices are unlikely to be the Bank’s overriding concern at the moment, because looming potential tariffs have set off a cacophony of alarm bells over global growth. Central banks around the world will be keen to keep rates as low as possible to help support any possible growth. As a result, the markets are pricing in three or four more rate cuts from the Bank of England this year – with the first expected in May.”

And there’s still more confidence from Jonathan Moyes, head of investment research at Wealth Club, who comments: “This likely gives the Bank of England the green light to cut interest rates in its May meeting. The UK economy is not out of the woods yet. There is a long and swinging road to reach the Bank’s 2% target. Services inflation remains stubbornly high, largely due to higher housing costs (higher rents and council tax). The rise in the energy price cap is also set to see inflation jump in April. 

“Whisper it quietly though, were it not for a global trade war, the UK consumer would be in excellent shape. Wage growth is running at 5.6%, a further three interest rate cuts this year will drive mortgage rates lower, food inflation is slowing, as is eating out and travel. Plus with the oil price in the low 60s, energy prices look to have peaked. If the UK can escape the worst of the global trade war, it might not all be doom and gloom for the UK consumer this year, and we haven’t said that for a while.”