BoE rate cuts look increasingly unlikely, says Equifax
Ahead of the Bank of England's interest rate decision on 30th July, the credit reference agency said borrowers on variable-rate mortgages are unlikely to see any reduction in their monthly repayments this year.
The prospect of further interest rate cuts appears to be fading, with households continuing to feel financial pressure, according to Equifax UK.
Ahead of the Bank of England’s Monetary Policy Committee (MPC) interest rate decision on 30th July, the credit reference agency said borrowers on variable-rate mortgages are unlikely to see any reduction in their monthly repayments this year.
Paul Heywood, chief data and analytics officer at Equifax UK, said: “The door looks firmly shut on the prospect of rate cuts for the foreseeable future.
“Those on variable mortgage rates are unlikely to see any reduction in their monthly bills this year, while the rising possibility of rate hikes is adding another layer of uncertainty to households, which have so far proven resilient but are without doubt feeling the squeeze.”
Heywood said affordability pressures are already influencing borrowing behaviour, with more consumers opting for longer mortgage terms to reduce monthly repayments.
He added: “Equifax data already shows 10% of new UK mortgages are being taken out on terms of 35 years or more, as borrowers choose to stretch out their repayments and pay more over the long run to help manage short-term affordability.”
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