The Bank of England has reduced the base rate by 0.25% to 4.25%, marking its first cut since February.
The Monetary Policy Committee (MPC) voted by a majority of 5 to 4 to cut.
The decision comes amid growing concerns over the UK’s sluggish economic growth and escalating global trade tensions, particularly following recent US tariff announcements.
Inflation has been trending downward, with the Consumer Prices Index (CPI) at 2.6% in April, edging closer to the Bank’s 2% target .
The reduction is expected to provide relief to mortgage holders and stimulate lending.
Reaction:
Nicholas Mendes, mortgage technical manager and head of marketing at John Charcol:
“The Bank of England’s decision to cut the base rate by 0.25% reflects a pragmatic response to the shifting economic landscape.
“Recent data has pointed to softening momentum both at home and abroad, and there is little doubt that ongoing global uncertainty, particularly around trade, has started to weigh more heavily on the outlook.
“With inflation coming down faster than expected and signs that the labour market is beginning to ease, there is a clear case for acting now rather than risking a more abrupt response later.
“For mortgage holders, this move brings some relief, particularly for those on tracker and variable-rate products, who should see an immediate reduction in monthly repayments.
“While fixed rates have already priced in much of this decision, the cut will support sentiment in the housing market at a time when affordability has been stretched and buyer activity has slowed.
“It also gives lenders a bit more breathing room to remain competitive, which could help stimulate demand, especially among first-time buyers.
“That said, this is unlikely to mark the start of a rapid easing cycle. Wage growth remains strong, fiscal changes are still filtering through, and services inflation is well above target.
“The Bank will need to tread carefully from here. While today’s cut is helpful, borrowers should continue to plan with caution.
“Locking in a competitive fixed rate still makes sense for many, particularly if there is any doubt about future income or affordability.”
Martin Swann, sales and managing director at Try Financial:
“Today’s base rate cut is very much welcomed not just by us and wider property market practitioners, but households everywhere in the UK, especially those battling with cost-of-living pressures.
“It’s good news, of course, for new clients looking to buy either residential or investment properties, particularly from a confidence perspective, but also for those with 5-year fixed rates taken out in 2020, which are about to mature in the next six months or so, and where payment shock for a good many will be acute.”
Hamish Martin, partner at LAVA Advisory Partners:
“With the Bank of England finally trimming the base rate to 4.25%, we could well see a noticeable shift in M&A appetite, especially from private equity, who have been slightly more cautious of late with such comparatively high rates.
“Lower borrowing costs open the door for more leveraged deals, and we’re already seeing increased interest in lower-mid-market assets that might have been priced out just a few months ago.
“For founders and business owners considering an exit, this could mark the start of a more favourable window, especially as buyers start to move more decisively and have lower-cost capital at their disposal.”
Paul Noble, CEO of Chetwood Bank:
“Following a second consecutive fall in inflation, many were expecting a bolder move from the Bank of England.
“The decision to cut rates by 0.25% rather than half a percentage point might appear underwhelming to some, given the challenges that are being faced – especially the uncertainty around Trump’s tariff hikes.
“While the central bank has taken a cautious approach for some time, today’s move could risk underutilising a vital opportunity to restore confidence and stimulate growth in the market.
“That will come from the MPC making bold, market-altering decisions at its monthly meetings, rather than smaller, potentially less impactful changes that fail to make the most of our current inflationary improvements.
“For savers, the rates available today may be the most competitive we’ll see for some time, so it’s important they take steps to protect their financial position.
“A quick review of your savings could help ensure your money continues to deliver value, and that you’re not missing out on the strongest rates while they last.”
Paresh Raja, CEO of Market Financial Solutions:
“The markets inked in this base rate cut several weeks ago, with many lenders having already dropped rates over the past fortnight.
“As a result, today’s decision might be met with a somewhat muted response. But we should be careful not to take another 0.25% reduction for granted; rates are trending in the right direction and borrowers will welcome every cut.
“With more rate cuts expected in the months to come, some property buyers and investors might decide to bide their time. But there’s an overwhelming sense that demand is returning to the market thanks to the increasingly favourable interest rate environment.
“Coupled with the usual seasonal trends we see, we’re expecting the summer months to be a busy period, and the focus from lenders has to be on fast, decisive action – giving brokers and borrowers clarity on product availability and rates, along with prompt decisions on applications, will be crucial in allowing the market to flourish.”
Tim Parkes, CEO of RAW Capital Partners:
“The only real question today was seemingly whether the Bank of England would be so bold as to vote for a 0.50% reduction.
“For now, the Bank is clearly sticking to a conservative strategy and, while there is pressure for more significant cuts, the broader expectation is still that there could be as many as four more base rate cuts from the Bank’s five remaining meetings this year.
“We are on the right path, even if the speed of travel is not fast enough for some. The base rate is now a full percentage point lower than the recent 5.25% peak we saw for much of 2023 and 2024.
“If indeed the base rate does continue to fall to 3.5% or even 3.25% by the end of this year, it will likely encourage many more property buyers and investors to enter the UK property market.
“Transactional activity and house prices could both see an uplift as a result, particularly as mortgage lenders reprice their products to reflect the medium-term predictions of a steadily falling base rate.”
Steve Cox, chief commercial officer at Fleet Mortgages:
“The Bank of England’s decision to cut Bank Base Rate today marks a further pivotal moment for the mortgage market and comes off the back of a steady downward trend in swap rates over recent months.
“We’ve already seen this reflected in product pricing, with Fleet ourselves having made a number of reductions to our buy-to-let product rates recently.
“For lenders and advisers operating in the buy-to-let sector, this provides a welcome boost — a clearer signal that affordability continues to improve, giving more landlord borrowers the opportunity to secure the funding they need.
“Of course, we can never be absolutely certain of the long-term direction of travel, but the recent trend does suggest rates will continue to edge downwards, which will only strengthen landlord confidence.
“Lower rates not only make deals more accessible but also ease the ongoing pressure on monthly mortgage payments — something that’s been front and centre for borrowers since the post mini-Budget turmoil.
“The rate shift since the summer of last year has shifted that dynamic, supporting landlords in maintaining sustainable portfolios and opening up options for remortgaging and further investment.”
Ryan McGrath, director of second charge mortgages at Pepper Money:
“Today’s decision reflects a rapidly changing macroeconomic landscape that the market is having to adapt to.
“For the most part, borrowers and first-time buyers will naturally rejoice at the easing of credit conditions that envelop the housing market, improving affordability and helping to unlock much needed lending at all parts of the chain.
“However, while rates have been cut today, many will continue to face tough decisions. For those households still reaping the benefits of a pre-2022 fixed rate, remortgaging in the current climate may seem like too big a gamble when there is a high probability that rates could fall further this year.
“A reliable option if homeowners need to unlock capital, but not to the detriment of their preferential mortgage rate, would be to unlock the equity in your current home through a secured loan to bring down monthly outgoings by consolidating debt or to improve instead of move.”
Alan Davison, chief commercial officer of Afin Bank:
“Today’s Base Rate cut was never in doubt as the economy desperately needs a boost, but I’m not sure it will immediately trigger an increase in mortgage demand.
“Nationwide reported a 0.6% drop in house price growth in April, following a jump in transactions in March as buyers rushed to beat the Stamp Duty changes.
“Whether that recovers in the coming months depends on consumer confidence, which is thin on the ground.
“Growth predictions for the UK economy have been cut, while inflation is expected to rise again, leading to higher prices and further pressure on household finances.
“So the big question is could we see further rates cuts from the Bank of England, which could cause borrowers to hold fire on their mortgage plans until interest rates have stabilised.”
Nathan Emerson, CEO of Propertymark:
“Today’s news will no doubt be extremely welcome for many, especially given current economic uncertainties.
“International bodies have recently stated they expect interest rates to fall in the UK as the year progresses. Overall, we hope to see interest rates further continue their downward trajectory over the course of 2025.
“The UK housing market has recently been buoyed by Stamp Duty threshold changes leading up to the start of April, and with the busier spring and summer months now here, this base rate reduction should attract even more buyers and sellers to the market and provide greater affordability.
“Housing is a central part of the UK economy, and we now hope to see considering the UK Government and the devolved administrations have shown a keen focus on housing growth, is that they look ahead to achieving their individual housebuilding targets to meet growing demand.”
Ben Thompson, Deputy CEO, Mortgage Advice Bureau:
“Today’s rate drop won’t come as much of a surprise, especially considering recent goings on across the pond. Despite inflation being likely to tick up again in the near term, the focus has now flipped to ensuring economic growth.
“Markets have been quick to price in future rate cuts, and consequently, it’s great to see so many mortgages now priced below 4%.
“We now have real wage growth, lower mortgage rates, and a favourable rate outlook, plus a record high number of mortgage products overall.
“We’re even seeing some helpful lending for first time buyers, and hopefully that continues to grow, enabling more renters to become homeowners.
“Notwithstanding what has recently become ‘predictable unpredictability’ globally, it feels as though we have a small tailwind for the first time in a long time (at least domestically).
“It does now feel like a good time to buy, and a better time to refinance for those that need to.
“For customers looking to get mortgage ready, now is a great time to take advantage of the market.
“With the expertise and guidance of a broker, you can secure a deal that works for you and your financial circumstances.”
Sarah Pennells, consumer finance specialist at Royal London:
“This rate cut is a double-edged sword. For mortgage holders on variable or tracker deals, the reduction will mean lower mortgage payments, which should be a boost to household budgets which have been stretched by the ‘Awful April’ bill rises.
“Interest rates on other forms of borrowing, such as credit cards, don’t always mirror falls in the base rate.
“Many savers are also borrowers, but some savers rely on their interest payments to provide an income. For them, any reduction in interest rates will not be welcome news.
“In the coming days and weeks, it’s likely we’ll see rates on easy-access and fixed-term savings accounts begin to fall, meaning savers may need to shop around more actively to get the best return.
“Those who are coming off a fixed-rate mortgage deal may have no choice but to switch to a higher rate when they remortgage.
“However, the good news is that competition among mortgage lenders has intensified in recent weeks, with a number now offering five-year fixed rate deals charging less than 4% interest.
“Anyone looking for a new mortgage deal should talk to a mortgage broker to ensure they get the best rate.”
Richard Pike, chief sales and marketing officer at Phoebus Software:
“The Bank of England’s decision to cut the base rate is not unexpected and reflects growing concerns around slower economic growth and trying to ease inflationary pressures.
“For the mortgage market, the big question is how this move affects swap rates, which had already been trending down in anticipation of today’s announcement.
“If we see sustained downward movement in swaps, lenders may begin pricing more competitively in the coming weeks, particularly in the fixed-rate space.
“However, geopolitical factors such as the recent announcement of US tariffs by Donald Trump have injected volatility into global markets and inflation forecasts, which in turn could limit how far UK rates fall in the medium term.
“The industry will need to remain agile in response to both monetary policy shifts and wider economic turbulence.”
Tony Hall, head of business development at Saffron for intermediaries:
“The recent price war among lenders was a clear indication that many had already factored in a potential base rate cut, so today’s news doesn’t come as a huge surprise.
“While rates will always fluctuate, we’re seeing more competitively priced deals across the board, including sub-4%, which is encouraging for buyers of all types and deposit sizes.
“Looking ahead, there’s growing confidence in the market that fixed rates will continue to come down throughout the rest of the year.
“This comes as the FCA launches a new consultation this week, aimed at making it cheaper for borrowers to switch or change their mortgage.
“With proposals already in the works to ease current stress-testing rules, it’s clear that regulators are also moving to improve affordability in the market, all of which is good news for potential buyers.”
Adam Ruddle, chief investment officer at LV=, said:
“The Bank of England cutting interest rates to 4.25% was widely expected, reflecting moderating inflation and a slowing economy amidst trade tensions.
“Encouragingly, this reduction could signal a series of rate cuts, with interest rates anticipated to fall to 3.5% by year-end. This is very dependent on the path of US trade policies and any trade agreements agreed.
“Homeowners and prospective buyers will likely breathe a sigh of relief, as lower interest rates may lead to reduced mortgage rates. However, savers may see diminished returns on their deposits.
“According to LV’s Wealth and Wellbeing research, just under one in five (18%) are concerned about their savings being devalued by low interest rates and inflation.
“Despite these concerns from savers, further cuts are expected. LV’s research shows more than two in five (41%) of mortgage holders are worrying about rising day to day costs, and lower rates could provide much needed relief for consumers.
“A reduction in interest rates may be a welcomed boost for the economy. Borrowing will become more affordable, thereby encouraging spending and investment.”
Patrick O’Donnell, senior investment strategist at Omnis Investments:
“The BoE has been in a pretty tricky position for quite a while now.
“Finding the balance between above target, persistent inflation, which is widely forecast to increase in 2025 and lacklustre growth is not easy.
“The tariff announcements in April and the increase in policy uncertainty have made their downside scenario more severe, due to the impact on global growth.
“The market pricing for this meeting hasn’t changed that much in three months, fully discounting a 0.25% move today.
“The median economist estimate was for eight members to vote for a 0.25% move and one member to vote for 0.50%. The actual voting split today had a more dovish skew.
“At the margin this will help UK markets. Risk sentiment is relatively buoyant today anyway.
“Of course it remains to be seen how long it lasts, with volatility expected to remain for the foreseeable future.”
Simon Webb, managing director of capital markets and finance at LiveMore:
“While this move may not immediately transform mortgage rates, today’s rate cut will provide relief to many borrowers, especially those coming to the end of fixed-rate deals or navigating affordability challenges in a high-cost environment.
“For older borrowers, many of whom are on fixed incomes, a reduction in rates can be crucial in easing monthly payments or improving affordability assessments. It’s important that we continue to see innovation and competition in the later life lending space, so that more people aged 50 and over can access the finance they need without being unfairly penalised by outdated criteria or economic headwinds.”
Sharon Beedham, relationship director at ONP Solicitors:
“Even a modest 0.25% cut can have a ripple effect, especially in a market as sentiment-driven as property.
“Buyers and homeowners alike have been looking for signs that affordability is improving — and a small base rate reduction, even if largely symbolic, could be just enough to restore some consumer confidence.
“For those conveyancers who saw intense activity leading up to March’s stamp duty deadline, this could be the catalyst that helps smooth what might otherwise have been a prolonged lull.
“We may not see an overnight spike in completions, but this kind of incremental shift could encourage more remortgaging activity and keep the sales pipeline ticking over.
“From a sector perspective, it’s about interpreting market signals and being ready to respond to renewed buyer intent, however subtle.”
Adrian MacDiarmid, head of mortgage lender relations at Barratt Redrow Developments:
“The cut in interest rates is a good thing.
“At the start of the year mortgage rates dropped, and we’re already seeing a lot of lenders competing for market share with lower rates, which will bring more opportunities to buy a home.
“Improving affordability assessments means that prospective homebuyers might also be able to borrow more than expected. For example, by opting for the security of a long-term fixed-rate mortgage, this could enable them to borrow up to six times their income.
“Choosing the right type of mortgage is important, as it can help save you a lot of money. While a fixed-rate mortgage is the most popular option overall, there are a lot of new products available now tailored to specific buyers.”
Neil Rudge, chief banking officer for commercial at Shawbrook:
“SMEs will breathe a sigh of relief at today’s decision to cut the base rate after grappling with numerous challenges both at home and abroad during April.
“The duelling factors of the increase to employer National Insurance contributions and the wider turmoil caused by the proposed imposition of tariffs has created significant uncertainty, particularly for SMEs who export internationally.
“Despite the looming uncertainty, falling inflation and now, a reduction to the interest rate is quietly good news for the UK, and should help to spark further growth moving forward.
“With experts predicting several more rate cuts this year, SMEs should begin to see the cost of borrowing come down further at a time where pressures are mounting.
“Our latest research found that 49% of SMEs labelled cash flow as an issue, if this is the case for your business, consider speaking to a specialist lender who can help find a tailored solution to unlock capital.”
Nick Leeming, chairman of Jackson-Stops:
“Today’s decision demonstrates the Bank of England’s commitment to steering the factors within its control to preserve market confidence.
“In an environment of persistent inflation and unpredictable global headwinds, maintaining stability is crucial.
“Continuing to cut the base rate will ease pressure on borrowers and encourage greater levels of lending, supporting the Government’s growth agenda.
“The cut will be welcome both for homeowners looking to move or first-time buyers agreeing a mortgage for the first time.
“After such a distorted spike in completion levels in March ahead of the impending Stamp Duty changes, a cut to the base rate should gradually translate into more favourable mortgage rates, improving affordability prospects for those that narrowly missed out.
“While Stamp Duty changes add a higher upfront cost, lower interest rates over time will help buyers and sellers gain in the long run.
“This should go some way to reassure potential buyers that the market offers the certainty they need to take their next step.”
Joe Phelan, money.co.uk business savings expert:
“The Bank of England has, as expected, cut the base rate to 4.25%, and analysts are predicting more cuts before the end of the year.
“Base rate cuts aren’t an inherently good or bad thing. If you’re planning to borrow, lower rates could make financing more affordable. But, if you’re holding savings, your returns might take a hit, meaning now could be a smart time to reassess how your money is working for you.
“With the economy currently going through seemingly daily shifts, now’s a good time to review your business’ financial strategy.
“From securing a competitive savings rate to exploring funding options, taking action today could help you stay ahead of whatever’s next. Shop around to see if you could switch to a lower rate. Even a small drop in interest can make a big difference to your bottom line.”
Mark Harris, chief executive of mortgage broker SPF Private Clients:
“The Bank of England has reduced rates by a quarter point to 4.25%, which comes as no real surprise with CPI inflation at 2.6% in the year to March, down from 2.8% in February.
“However, the Bank missed an opportunity to be bold and cut by a half point to 4%. This would have sent out a strong message, helping boost the housing market and wider economy, particularly as the stamp duty concession has now ended.
“Swap rates continue on a downwards path with lenders reducing mortgage rates in recent weeks and a plethora of sub-4% deals now available. This latest rate reduction was largely expected by the markets and has been factored into pricing already.
“However, a continual decline in Swaps would enable lenders to price more keenly in future, easing borrowers’ affordability concerns further.
“Those looking to take out a new mortgage or refinance in coming months should plan ahead as much as possible, seeking advice from a whole-of-market broker.
“We expect the MPC to continue on the anticipated path for base rate with further reductions in coming months but what can’t be guaranteed is where rates end up, nor the pace it takes to get there.”
James Burgess, head of commercial and insolvency expert at Atradius UK:
“Today’s interest rate cut to 4.25% will come as a welcome relief to businesses and households across the UK.
“After months of subdued economic forecasts and ongoing geopolitical uncertainty, this move signals a cautious but positive shift in the economic outlook.
“With inflation easing to 2.6% last month, this rate cut should help restore confidence, encouraging spending and investment while supporting the government’s strategy for steady, sustainable growth.
“That said, businesses should stay focused on liquidity, reinforce supply chains, and protect cash flow through trade credit insurance to remain resilient and ready to seize new opportunities.”
Tomer Aboody, director of specialist lender MT Finance, says:
“With the rate cut today, plus potentially further reductions before the end of the year, this will help incentivise buyers and encourage sellers to be active.
“Affordability for buyers is one of, if not the most important, factor in making a decision to move, so with a lower base rate, which in turn should mean lower mortgage rates, buyers will look to take advantage and take the plunge.
“An active property market not only means more sales and an uptick in prices but also boosts the wider economy.”
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts:
“A rate cut helps the housing market hugely as it gives borrowers an affordability boost, filtering through to lower mortgage rates, which encourage activity.
“The Bank of England was widely expected to cut rates this month, and with borrowing costs remaining high compared to the pre-2022 norm, this is a welcome move.
“The Stamp Duty holiday has helped transaction levels with an increase in sales agreed in those chains where there is a first-time buyer keen to take advantage of the discount before the end of March.
“While this has been welcome, there have been concerns that once the stamp duty holiday ends, there will be a dip in activity and transactions, which is why the timing of this rate cut is so important.”
Iain McKenzie, CEO of The Guild of Property Professionals:
“Excellent news from the Bank of England. This decision to cut the base rate is a welcome boost for homebuyers and the wider property market.
“We’ve already seen mortgage rates easing, with sub-4% deals re-emerging, and this will only fuel that positive momentum, making homeownership more attainable.
“Despite global uncertainties, mover activity remains resilient, and with strong housing supply and sales agreed up year-on-year, the market is adapting well.
“This rate cut will further underpin confidence, supporting the forecast of a 5% uplift in sales volumes this year, particularly as we see the time to sell quickening. It’s a clear green light for those considering a move.”
Nicholas Hyett, investment manager at Wealth Club:
“With inflation falling, and unexpectedly strong economic growth in February, the Bank of England has a remarkable freedom of movement at the moment. That’s reflected in the MPC vote split this time round – ranging from 4.0% to 4.5%
“Ultimately though the committee has, as expected, used its flexibility to clear the way for a soft landing after a period of moderate but stubbornly rising inflation at the end of last year.
“The Government and markets will welcome a little bit of extra padding. Changes to the national living wage and employer national insurance contributions only came into effect in April, and have the potential to spark an uncomfortable combination of rising prices and weaker labour markets.
“So far the economy has dealt with that looming speedbump surprisingly well, but some defensive driving from the Bank is no bad thing in an unpredictable market where key players have been known to suffer from the occasional bit of road rage.”
Colin Bell, chief operating officer at Perenna:
“Today’s rate cut is a reflection of the UK’s slowing economic growth – despite the broader, global economic uncertainties, the need to stimulate spending at home is clearly the priority for the MPC.
“This will undoubtedly be positive news for many home buyers and those looking to remortgage, offering some relief and creating some demand in the short-term.
“But for many aspiring homeowners, the impact will be limited – the latest research from the Adam Smith Institute highlights the stark reality for English renters who work 125 days a year just to pay their landlords leaving them struggling to save for a deposit.
“Even those who do have a sizeable deposit remain locked out of traditional mortgage options thanks to stringent affordability rules.
“If policymakers are serious about addressing the housing crisis, they must go beyond rate cuts and tackle the structural barriers to homeownership.
“The FCA’s consultation on simplifying mortgage rules is a welcome first step as this will make it easier for homeowners and potential buyers access to a broader variety of solutions that fit their needs throughout the life cycle of their mortgage.
“We look forward to seeing what comes of the public discussion in June.”
Jason Tebb, president of OnTheMarket:
“As expected, the Bank of England has reduced interest rates by a quarter point to 4.25%.
“With inflation falling in March, indicating that it is seemingly under control even if still above the 2% target, the rate setters had no real reason to hold rates again.
“A reduction in interest rates sends an important message to buyers and sellers, enabling them to plan ahead with more confidence.
“It should ease affordability and boost the housing market, leading to an improvement in activity and transaction levels.
“With the Stamp Duty concession ending in March, expected further rate reductions should give the market welcome added momentum as the year progresses.”
John Phillips, CEO of Just Mortgages and Spicerhaart:
“Today’s decision was clearly not a surprise, with financial markets pricing in a cut with unanimous certainty.
“What will be interesting though is what happens next and whether today’s call is the opening of the flood gates for further and more frequent cuts – with some predicting three or even four more cuts in 2025.
“While there’s no question that President Trump’s trade war has forced the central bank to act with some urgency, so have fears around inflation and both business and consumer confidence – particularly in response to higher taxes and costs.
“Either way, movement on the base rate is absolutely welcomed and will certainly help to stimulate demand.
“Given the certainty around today’s news, we’ve already seen swaps respond positively and lenders re-price, with the competition for market share likely only to increase with future moves.
“If not already, now is the time for brokers to mobilise – to get out into their local area to share this update.
“It’s so easy to get bogged down by the news right now, when in fact we can share something really positive with the many who have the appetite to buy, but need help navigating the market.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman:
“With so much media speculation over the past few weeks, and the need to boost economic growth because of the talk surrounding tariffs, any cut to base rate today has already been largely factored in by homebuyers.
“Nevertheless the reduction will serve as a welcome shot in the arm to activity which has been flagging lately since the stamp duty concession was removed at the end of March.”
Kevin Roberts, managing director of L&G’s Mortgage Services business:
“Today’s decision to cut the base rate by 0.25% will be very welcome news for many homeowners and prospective homebuyers, and this will likely boost confidence in an already buoyant market.
“If you are looking to buy, or remortgage, now is a great time to consult with a mortgage broker to take advantage of this opportunity.
“We’ve already seen many lenders reduce their rates, and competition between providers will bring more tailored products to the market.
“We know the demand is there – our broker mortgage search data shows first-time buyer and remortgaging activity jumped 45% and 34% respectively since last year.”
Matt Harrison, commercial director at Finova Broker:
“Today’s modest 0.25% cut is a welcome first step, but it feels more like the Bank is dipping its toe in rather than making waves.
“For brokers and mortgage clubs this move won’t dramatically shift the market—but it does give lenders the green light to start refining product strategies.
“Brokers will likely see a gradual increase in client confidence, particularly among first-time buyers and remortgagers who’ve been waiting for signs of movement.
“Lenders may begin adjusting criteria and pricing, which means sourcing platforms and tech tools that can track and compare rapid market shifts will be critical.
“For mortgage clubs, this is an opportunity to support members by curating product updates, sharing lender insight, and helping advisers guide clients through an uncertain but improving rate environment.
“While not a game-changer, this rate cut could be the start of a broader shift—and now is the time for brokers to get ahead of the curve.”
Jonathan Handford, managing director at national estate agent group Fine & Country:
“The UK economy has been handed a cautious boost, as the Bank of England takes action to steady growth and ease pressure on households and businesses.
“With inflation cooling and global uncertainty mounting, the move signals a shift towards supporting recovery.
“With inflation dropping to 2.6% and signs that growth is slowing, the Bank made the move to help steady the ship.
“New tariffs introduced by the US have added to economic jitters, with global trade tensions starting to bite. The cut is designed to support households and businesses as the economy faces a tricky few months ahead.
“For homeowners and buyers, this is welcome news. Mortgage rates had already started to come down in anticipation, and today’s decision could lead to even better deals, especially on fixed-rate products.
“That’s good news for first-time buyers and anyone looking to move, at a time when affordability is still a major hurdle.
“The cut also comes during what’s usually a busy time for the housing market. With spring activity already picking up, lower borrowing costs could give the market an extra push, helping more people take the leap.
“While the Bank hasn’t ruled out further cuts later this year, it’s treading carefully. For now, though, today’s move offers some relief and a glimmer of encouragement for buyers and homeowners alike.”
Paul Broadhead, head of mortgage and housing policy at the Building Societies Association:
“Even though rates are slowly reducing, many first-time buyers will still struggle to achieve homeownership due to the double affordability challenge of the high cost of buying and the high cost of owning a home.
“Our recent report – The Missing Millions – looks at the challenges facing first time buyers. It highlights that mortgage repayments as a proportion of income for new first-time buyers has increased by around 30% (22% of income) since its low in 2020 (18% of income).
“So, whilst today’s announcement is welcome news, more needs to be done. Further cuts to the Bank Rate are anticipated this year, but we also need changes to mortgage regulations to provide lenders with more flexibility to provide real support for today’s first-time buyers.”
Theo Chatha, chief financial officer, Bibby Financial Services:
“Today’s rate cut from the Bank of England represents a potential green light for SME investment, as over six in 10 (62%) SMEs say they will feel more confident investing if rates fall. But in today’s uncertain climate, a cut no longer holds the promise it once did.
“On paper, lower rates should be a boost for SMEs and the economy, easing borrowing costs and encouraging business investment. But relief from a cut could be short-lived, as the Bank may need to raise rates again later in the year to curb inflationary pressure due to tariffs friction.
“This threatens to dampen SMEs’ ambition – meaning investment plans are delayed further, but SMEs can’t afford a ‘wait and see’ approach to decision making.
“Against economic uncertainty, businesses that continue to invest and plan for every scenario will stay ahead of the competition.”
Peter Stimson, head of product at MPowered Mortgages:
“No surprise on the decision, but no slam dunk either.
“The last time the Bank of England’s ratesetting committee voted to reduce the Base Rate, all nine members were unequivocally in favour.
“Then, as now, the decision was never in doubt. But the fact that this time two members wanted to hold interest rates at 4.5% is a puzzle.
“The UK’s darkening economic outlook and the very real threat of a global recession have led the mortgage markets to price in a steady ratcheting down of the Base Rate this year.
“But the Bank’s tinge of caution today hints that the next cut may not come as soon as thought, and raises the question that the mortgage market might have got somewhat ahead of itself.
“In recent weeks the swaps market has been suggesting that the next Base Rate cut could come as soon as June, but that is suddenly looking less likely.
“As swap rates digest today’s decision and the Bank’s accompanying minutes, mortgage lenders might just press pause on their plans to announce more interest rates in coming weeks.”
Nick Henshaw, head of intermediaries distribution at Wesleyan:
“Today’s decision to cut rates was widely anticipated and it looks likely that rates will only fall further during 2025, with as many as three more cuts expected.
“In this environment, more savers will be looking away from cash towards equities to maximise returns. But many will also be worried at the volatility they see in the market, particularly over the last few weeks.
“For these people, the option of having part of their portfolio in a ‘smoothed’ fund could be incredibly valuable – giving them market exposure, but with a ‘smoothed’ investment journey that reduces the effect of short-term market fluctuations.”
Andrew Gething, managing director of MorganAsh:
“Today’s cut marks a real shift in sentiment around the outlook on interest rates as we move away from the gradual, careful approach we’ve grown accustomed to.
“There’s no question that geo-political tensions have necessitated this change in pace, as well as increasing concerns around UK growth.
“Nonetheless, the cut today and the prospect of further cuts later in the year will be celebrated by potential borrowers, current borrowers not on fixed rates and by households that have seen their health, well-being and living standards impacted by persistent financial pressure.
“Even with today’s cut, and the narrative around future interest rates, we know this doesn’t solve all problems. Inflation is far from neutralised and with trade wars brewing, we’re not out of the woods yet.
“The reality is that financial difficulties will be just one factor among many that could push clients into a vulnerable position. We have to stay vigilant.
“In its most recent review, the FCA identified that many firms still cannot monitor or take action on outcomes for vulnerable customers, or provide suitable support at the time of need.
“No matter the interest rate environment, knowing who our vulnerable customers are and delivering the right outcomes has to be a priority for all firms.”
