The monetary policy committee of the Bank of England has revealed its latest base rate decision.
As predicted by most analysts, it’s a cut of 0.25% to 4%.
This is the fifth reduction since August last year, when rates started steadily coming down from a peak of 5.25%.
There was a strong expectation of the cut following the release of Office for National Statistics (ONS) showing the rate of UK unemployment rising to 4.7% in the three months to May – the highest level for four years.
And average earnings growth, excluding bonuses, slowed to 5% in the same period – its lowest level for almost three years.
Bank of England Governor Andrew Bailey recently signposted that the Bank would be prepared to cut rates if the jobs market showed signs of weakening.
Reaction is coming in thick and fast to today’s move.
Paul Hardy, managing director of LSL Estate Agency Franchising, comments: “The Bank of England’s 0.25% base rate cut is a positive step for the property sector, reinforcing market confidence and potentially accelerating buyer activity. We’ve seen a steady recovery in interest from buyers this year, and with stock levels at a 13-year high, buyers now have plenty choice.
“As a national franchisor, we see regional variations across our network, and this rate cut could help balance demand – especially in areas like the south, where the stamp duty increase earlier in the year has had more impact.
“The interest rate drop is also encouraging for first-time buyers and those remortgaging, as lenders may respond with more competitive products.”
Kevin Shaw, national sales managing director at LRG, says: “With the rate now back to where it was in March 2023 and a further cut likely before the end of the year (probably in November), this provides renewed momentum for buyers, sellers and developers alike.
“A property-led approach to growth has been a priority of this government for the last year, and we are now seeing that strategy bear fruit. With careful monetary easing, the sector now growing in a measured, and therefore, a sustainable way.”
Rachel Springall, finance expert at Moneyfactscompare, comments: “The continuation of falling mortgage rates will instil a sense of confidence among borrowers, with the Moneyfacts Average Mortgage Rate dropping by 0.41% over the past six months and down by 0.61% year-on-year.
“Lenders have also been relaxing stress tests to further support mortgage customers, but it is worth pointing out that fixed rates can move outside of base rate cuts.
“The unsteadiness of swap rates last month was a forewarning for lenders not to get too carried away with fixed rate mortgage cuts which is why the margins of cuts by lenders were mixed. In positive news, swap rates have been edging downwards once again in recent days, which will give lenders more scope to reduce fixed mortgage rates.
“This movement, coupled with expectations from economists for more cuts to the Bank of England base rate before the year is over, spells good news for millions of borrowers who need to refinance.”
Alpa Bhakta, chief executive of Butterfield Mortgages, states: “Today’s rate cut will be welcomed by the Prime Central London (PCL) market. 2025 has been a challenging year so far and lower rates will help to boost borrower confidence. That said, many investors remain cautious and are seeking greater stability before committing to their investment plans. Lenders need to continue providing the tailored support and transparency required to navigate the market and maintain momentum.”
And Paresh Raja, chief executive of Market Financial Solutions, sees it this way: “Inflation might remain above the 2% target, but a softening labour market and sluggish economic growth mean the Bank of England is justified in taking this action. More of the ‘wait-and-see’ approach looked like doing more harm than good, and this is likely to provide the UK property market with a real boost.
