Today, the Bank of England announced a 0.25% reduction in the base rate, bringing it down to 5%. This marks the first time in over four years, since the onset of the pandemic, that the base rate has decreased. The base rate is the interest rate the Bank of England charges other banks and lenders to borrow money, which in turn affects the interest rates customers pay on credit products.
In recent years, the Bank of England had been steadily increasing interest rates to combat inflation. The rationale was that by making borrowing more expensive, consumers would spend less, thereby reducing demand for goods and services and helping to lower prices.
Today’s rate cut is welcome news for mortgage borrowers with variable or tracker rate products, as they will see a slight decrease in their monthly payments starting today.
For more details, please see the article linked below:
More information on the rate cut
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