Interest rates LIVE: Bank of England decision due today for millions of households with a mortgage

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We’re wrapping up our live blog coverage now, but you can read our full in-depth analysis on what the interest rate cut means for your money here. To recap, the Bank of England has cut its base rate from 4.75% to 4.5% but it also halved its growth forecast for the UK economy for this year. Keep an eye on The Mirror money page for the latest updates.

How much will mortgage costs fall by now?

It all depends on what type of mortgage you have. If you have a tracker mortgage, your monthly payments will fall by nearly £29 on average. The average saving for a standard variable rate (SVR) is around £17 a month, if the base rate reduction is passed on in full. The rate on SVR mortgages is set by individual lenders. If you have a fixed rate mortgage, your monthly repayments won’t change until you come to remortgage.

Andrew Bailey: ‘Donald Trump could slow growth’

Govenor Andrew Bailey has suggested that US tariffs could slow down growth across the wider global economy. He said: “If there were to be tariffs that contributed to a fragmentation of the world economy, that would be negative for growth for the world economy. I hope that doesn’t happen, but that could happen.

“The impacts on inflation are much more ambiguous. It depends on the reaction of other countries to the tariffs, whether that leads to a redirection of trade and what impact that has on exchange rates. You can’t have a clear and unambiguous forecast of what it means for inflation, but we will of course follow it very carefully.”

‘Savers may feel disappointment’

The only downside to interest rates going down, is you may not get as good of a return on your savings, says Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners. She said: “Savers may feel disappointment at the prospect of a lower return on their savings pots. The worst of the financial squeeze may now seem to be behind us, but the rapid price rises seen in recent years are pretty much baked in and a creeping tax burden as personal allowances remain frozen temper the better news on borrowing costs.”

When is the next Bank of England base rate decision?

The Bank of England meets roughly every six weeks and its next base rate decision is due on March 20 – but the question is, will we see another rate cut next time?

Andrew Bailey: ‘I am a supporter of Rachel Reeves growth plans’

Andrew Bailey has said he is a supporter of long-term growth plans that have been announced by Chancellor Rachel Reeves. He said: “I am a very strong supporter of the growth agenda of this Government and what the previous government had. Growth rate in the UK has been low since the financial crisis – addressing those questions is critical, so I very strongly agree with the Chancellor.

“Structural policies take time to come through. As we are looking at a two to three year horizon, you wouldn’t expect that to come through quickly. But that does not mean it doesn’t matter and won’t have a positive impact.”

Graham Hiscott: ‘Bank of England has added one key word to its statements’

The Mirror’s Head of Business Graham Hiscott is at the Bank of England press conference. The Bank of England has previously indicated that future rate cuts would be “gradual” – but has now added the word “careful” to its statements, he writes. Governor Andrew Bailey, explaining why it had done so, said: “There is greater uncertainty that we face in the current environment, both domestically and globally.”

Mr Bailey explained why the Bank cut rates while also warning that inflation is expected to pick up again this year. The longer term outlook was inflation was down – or disinflationary – he said. Mr Bailey told the press conference: “The judgement that we have made today, which has allowed us to take the next step to reduce interest rates, is that the future path is disinflation.”

What about Donald Trump?

The Bank of England said it had not factored the potential effects of Donald Trump’s trade tariffs on its forecasts. Laura Suter, director of personal finance at AJ Bell, warned: “Donald Trump’s trade war could prove inflationary, if the cost of new tariffs gets passed on to consumers. On top of that, higher wage costs land in April, with many businesses saying that cost will have to be passed on to consumers. And we’re expecting higher energy prices to land in April too, as Ofgem’s energy price cap rises again. All of that could prove inflationary – and higher inflation likely means a delay to future interest rate cuts.”

Andrew Bailey: ‘Households still holding back on spending’

Andrew Bailey continued: “Metrics of business and consumer confidence have deteriorated over recent months, and contacts of the Bank’s agents report that consumers are more price conscious and holding back on spending. This is consistent with a slowdown in demand. Equally, the disinflation process has been slow too and both services price inflation and pay growth remain at elevated levels.”

Andrew Bailey: ‘There will be bumps in the road’

Govenor Andrew Bailey is now taking a press conference in London, where he warned there will be “bumps” in the road to bring inflation down – and keep it under control. He said: “We expect to be able to cut the bank rate further as the disinflation process continues.

“But we will have to judge meeting by meeting how far and how fast. We live in an uncertain world and the road ahead will have bumps. We expect inflation to increase this year, to a peak of about 3.7% before returning to the 2% targets. We will set the Bank rate to ensure that it does so sustainably.”

How many more rate cuts can we expect?

We can’t know for sure, but markets are currently pricing in three rate cuts this year. Mark Harris, chief executive of mortgage broker SPF Private Clients said: “The question is when the next rate cut will come, with markets pricing in three reductions to base rate this year. Much attention will be paid to the voting pattern of the committee at this meeting and others to see how fast, and far, further rate reductions will happen.”

‘50,000 households face £3,000 mortgage timebomb’

Greg Marsh, household finance expert and CEO of money-saving tool Nous, warned how those on cheap fixed rates are still yet to face higher costs from the previous interest rate hikes. He explains how in February alone, 50,000 households will be coming off five-year mortgages and will see their payments rise by nearly £300 a month.

He said: “Falling interest rates are welcome news for mortgage holders. But the UK’s mortgage timebomb hasn’t fully exploded. Millions of households are still on mortgage rates below 3% and will see their monthly payments soar when they refinance over the next three years.”

‘First-time buyers still face affordability challenge’

Paul Broadhead, Head of Mortgage and Housing Policy at the Building Societies Association, said first-time buyers are generally feeling more positive about the property market – but warned they still face hurdles when it comes to getting on the ladder.

He said: “Despite their optimism, we know that first-time buyers face a considerable affordability challenge. Our report shows around two-thirds of people consider the biggest barriers to homeownership are affordability of monthly mortgage repayments and raising a deposit.

“Bank rate cuts alone will not ease affordability. We need a long-term housing strategy, alongside a review of mortgage regulation that considers the relative costs and benefits of stricter regulation versus the social benefits of homeownership, to support more first-time buyers into homeownership.”

TUC boss: ‘Bank of England must keep moving with rate cuts’

TUC General Secretary Paul Nowak has urged the Bank of England to continue easing the pressure of borrowing for struggling households. He said: “This rate cut is badly needed to help lift the economy out of stagnation. The Bank must now keep moving with further cuts to support households and businesses in the months ahead.

“Lower borrowing costs will ease pressures on households, helping families with their weekly budgets and leaving them with more to spend. And it will make it more affordable for businesses to invest and grow.”

Rachel Reeves: ‘Not satisfied with growth rate’

Chancellor Rachel Reeves said the interest rate cut was “welcome news” but that she was still “not satisfied” with growth. She said: “This interest rate cut is welcome news, helping ease the cost of living pressures felt by families across the country and making it easier for businesses to borrow to grow.

“However, I am still not satisfied with the growth rate. Our promise in our Plan for Change is to go further and faster to kickstart economic growth to put more money in working people’s pockets. That’s why we are taking on the blockers to get Britain building again, ripping up unnecessary regulatory barriers and investing in our country to rebuild roads, rail and vital infrastructure.”

…but it’s not all good news

The Bank of England has halved its growth forecast for the UK economy to 0.75% for this year, down from previous estimates of 1.5%. This will be a blow to Chancellor Rachel Reeves, who has pledged to kickstart economic growth. But the MPC expects the economy to grow faster than expected in the longer term, with a growth rate of 1.5% for 2026 and 2027. Inflation is now expected to peak at a higher rate of 3.7% later in the summer, because of higher energy prices.

Andrew Bailey: ‘We’ll be watching economy closely’

Governor Andrew Bailey said the base rate cut will be “welcome news to many” but warned the Bank of England is “monitoring the UK economy and global developments very closely, and taking a gradual and careful approach to reducing rates further”. He added: “Low and stable inflation is the foundation of a healthy economy and it’s the Bank of England’s job to ensure that.”

Going in the right direction

Seven members of the MPC voted for a base rate reduction to 4.5%. No one voted for it to be held this time – and two members (Swati Dhingra and Catherine Mann) wanted a sharper reduction to 4.25%. At the latest meeting, six out of the nine MPC members voted for it to be held at 4.75%.

BREAKING: Bank of England cuts interest rates to 4.5%

The Bank of England has cut its base rate from 4.75% to 4.5% – the third reduction since August 2024. The base rate is now at its lowest level in more than 18 months.

Bank of England decision due imminently

The Bank of England decision on interest rates is due in just ten minutes time. To summarise, we’re expecting a cut from 4.75% to 4.5% and this would be good news for anyone with a tracker mortgage. However, it isn’t impossible that the Bank of England could keep rates held again – watch this space…

Interest rates over time

This graph from the Bank of England shows how interest rates have changed over the past few years. The time when the base rate fell to an historic low of 0.1% in 2020 seems a distant memory now… but let’s not forget how it hit an eye-watering 17% in 1979.

Interest rates and inflation – how are they linked?

When interest rates are higher, the cost of borrowing is more expensive, which means people have less disposable income. If people are spending less, this then brings down demand for goods and lowers prices. Inflation is a measure of the pace of price rises, so if prices come down, inflation is then lower. The base rate stood at just 0.1% in December 2021. It reached a peak of 5.25% in August 2023 and was finally cut to 5% in August 2024.

What does it mean if I have a credit card or loan?

If your credit card is linked to the base rate, then how much you pay back in interest can be affected when it is changed. You should get 30 days’ notice if your interest rate is going up. Taking out a new credit now is more expensive compared to 12 months ago, due to how much rates have risen.

Interest rates on personal loans and car financing are normally fixed – but do check with your lender to be sure. Read through the terms and conditions of your agreement to see if your rate could change.

What does it mean for savings rates?

The top savings accounts still pay above the rate of inflation – but you should act fast before rates come down further. Right now, cash ISAs pay more than easy-access accounts. The best cash ISA rate right now is 5.16% from Trading 212, while the best rate for normal easy-access accounts is 4.85% from Coventry Building Society and Chip.

Regular saving accounts pay even more than this – but you’re normally limited to how much money you can save each month. For example, Principality Building Society pays 8% fixed for six months on up to £200 a month.

‘Bank of England has more breathing space’

Steve Matthews, Investment Director, Liquidity at Canada Life Asset Management, explained how the Bank of England will be looking to help stimulate the economy, now inflation has cooled from the 41-year-high of 11.1% that we saw in 2021. He said: “Whilst UK CPI inflation has been unpredictable over the past year, we’re not in the same economic environment as when inflation spiked in 2021. This means that the Bank of England has more breathing space to focus on stimulating the UK economy.

“Fears of stagflation will over-ride any immediate desire to drive down inflation, meaning we are likely to see a cut of 25bps, lowering the base rate to 4.5%. With largely harmonic comments coming from the Monetary Policy Committee, we expect this long-signalled decision to be an 8-1 vote. Earlier this year, markets were playing down the potential number of cuts in 2025, however most are now pricing in three to four cuts. This aligns with our view that the Bank of England will lower the base rate each quarter to arrive at 3.75% by the end of the year.”

Latest mortgage rates ahead of Bank of England update

Financial comparison website Moneyfacts has just released its daily mortgage rates data. It shows the average two-year fixed residential mortgage rate today is 5.50%, down from 5.51% the previous working day, and the average five-year fix is 5.30%, down from 5.31% the previous working day.

Rachel Springall, Finance Expert at Moneyfacts, said: “Millions of borrowers are due to come off cheap fixed mortgages, so they will be waiting with bated breath for mortgage rates to fall. The incentive to switch away from a standard variable rate (SVR) remains prevalent as a typical mortgage borrower being charged the current average SVR of 7.78% would be paying £355 more per month, compared to a typical two-year fixed rate.”

What time is the Bank of England announcement?

The Bank of England will announce its latest decision on interest rates at 12pm this afternoon. Its Monetary Policy Committee (MPC) meets eight times a year, which is roughly every six weeks, to decide whether interest rates should be held, or go up or down. The MPC is made up of nine members including the Bank of England governor Andrew Bailey. The full list of members are:

• Andrew Bailey – Governor, Bank of England
• Sarah Breeden – Deputy Governor, Financial Stability
• Dr Swati Dhingra – External member, Monetary Policy Committee
• Megan Greene – External member, Monetary Policy Committee
• Catherine L Mann – External member, Monetary Policy Committee
• Clare Lombardelli – Deputy Governor, Monetary Policy
• Huw Pill – Chief Economist and Executive Director, Monetary Analysis
• Sir Dave Ramsden – Deputy Governor, Markets and Banking
• Professor Alan Taylor – External member, Monetary Policy Committee

How does it affect my mortgage?

If you have a tracker mortgage, your monthly repayments will be reduced if the Bank of England confirms another cut today. This is because tracker mortgages follow the movements of the base rate. Another 0.25 percentage point cut would typically save around £29 on the average monthly tracker repayment, according to UK Finance.

But keep in mind, those on tracker mortgages have seen their costs soar over the past few years following the previous interest rate hikes – which means their monthly repayments are substantially higher compared to before the base rate started to go up. If you’re on a standard variable rate (SVR) deal, then it is down to your lender to decide whether they change your rate when there is a Bank of England update. You’ll usually be moved on to the SVR of your existing lender once your current mortgage deal ends.

If you have a fixed rate mortgage, your deal does not change when the base rate is updated, as your monthly repayments are fixed for a set period of years. However, millions of homeowners are being hit by far higher costs when they’ve come to remortgage.

What is the base rate – and how does it impact me?

The base rate is what the Bank of England charges other banks and lenders to borrow money – this then impacts how much you’re charged as a customer when you take out credit, for example, a mortgage or credit card. This means when the base rate is higher, it costs more to borrow money as you’re paying more in interest. But it isn’t all bad news – higher interest rates have meant better returns on savings for the past few years.

Welcome to our interest rates live blog

Good morning – and welcome to our interest rates live blog! The Bank of England is due to deliver its latest base rate update at 12pm and we’ll be providing you with all the key analysis in the run-up to this afternoon. For a quick recap, the Bank of England held its base rate at 4.75% in December – but markets are expecting another cut today to 4.5%.

If you’re wondering what this means for you, email us all your questions at: mirror.money.saving@mirror.co.uk