Predicted increases to the Bank of England (BoE) Base Rate have been lowered by markets as they react to Rishi Sunak’s success in the latest Conservative leadership contest.
Markets had been anticipating that interest rates would peak at over 6% next year.
But according to data from Bloomberg markets are now forecasting an interest rate of between 4.8% and 4.9%.
This is the lowest interest rate forecast since former Chancellor Kwasi Kwarteng’s failed mini-Budget on 23rd September.
Markets are also anticipating that the next interest rate decision from the BoE could be lower than the 1% that had been previously forecast.
The market has been quietly steadying over the past 11 days following the appointment of Jeremy Hunt as Chancellor. Hunt is widely expected to remain in post under Sunak.
As things stand the average rate for a 2-year fixed mortgage is currently 6.55%, according to Moneyfacts.
While Sunak will be invited to form a Government by the King later this morning before making a speech before lunchtime from Downing Street.
