Interest rate drops not likely until autumn, leading economists warn homeowners

5 May 2024, 18:09 | Updated: 5 May 2024, 19:19

Homeowners face another six agonising months before interest rates drop as the Bank of England delays cuts, leading economists warn.
Homeowners face another six agonising months before interest rates drop as the Bank of England delays cuts, leading economists warn. Picture: Alamy

By Chay Quinn

Homeowners face another six agonising months before interest rates drop as the Bank of England delays cuts, leading economists warn.

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The BoE has kept the base rate at 5.25% since last August to try and tackle inflation.

But Britain's central bank has faced heavy criticism for keeping the rate the same - including from Tories who believe cuts could revitalise the economy.

Read More: Scottish economy forecast to see slow, steady growth

Despite earlier predictions that the rate would be cut in the spring - some financial experts are now warning that they could not see lower interest for borrowers until autumn.

LONDON- JUNE, 2020: Bank of England and Royal Exchange Building, an historic and famous building in the City of London
LONDON- JUNE, 2020: Bank of England and Royal Exchange Building, an historic and famous building in the City of London. Picture: Alamy
Andrew Bailey, Governor of the Bank of England, during the Bank of England Monetary Policy Report press conference, at the Bank of England, London. Picture date: Thursday February 1, 2024.
The Monetary Policy Committee (MPC) at the Bank of England will meet this Thursday to decide the rate. Picture: Alamy

The Monetary Policy Committee (MPC) at the Bank of England will meet this Thursday to decide the rate.

It is expected to vote for no change.

Inflation fell to 3.2% in March, according to the latest figures but that is still short of the Bank’s 2% target.

Julian Jessop, economics fellow at the Institute of Economic Affairs, told the I: “The majority of MPC members are likely to want to wait for more evidence that underlying price pressures are cooling too, notably pay rises and services inflation.”

Andrew Goodwin, chief UK economist for Oxford Economics, told the I: “The data published in mid-April for services inflation and private sector regular pay growth has likely extinguished any remaining hopes of a move in May.

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