Bank of England Cuts Interest Rates to 4.5% in February 2025
The Bank of England has reduced interest rates to 4.5% in February 2025, marking a continued effort to ease inflationary pressures. This follows previous cuts from 5.25% in August 2024 and 4.75% in November 2024. The central bank has indicated that further rate reductions may occur if inflationary pressures continue to ease, though the timing and extent of these cuts remain uncertain and will depend on economic developments.
In response to the Bank of England’s rate cut, Nationwide Building Society has announced a reduction in its Standard Mortgage Rate (SMR) by 0.25%, bringing it down to 7.24%. This change will take effect from 1 March 2025. Additionally, tracker mortgage rates for existing Nationwide customers will automatically decrease in line with the Bank Rate adjustment. Nationwide, the UK’s third-largest mortgage provider, emphasised its commitment to passing on savings to its members, reflecting its mutual ownership model.
The mortgage market has shown signs of increased competition, with Nationwide introducing a sub-4% fixed-rate mortgage deal at 3.99% for a five-year term with a 60% loan-to-value ratio. Brokers suggest this could signal further rate reductions in the coming weeks, offering potential relief to borrowers. However, the broader economic outlook remains cautious, with inflation expected to rise temporarily to 3.7% in mid-2025 due to global energy costs and regulated price increases, before falling back to the Bank of England’s 2% target.
Why are interest rates high and how quickly might they fall?
We must continue to monitor the economy and global events carefully when making rate decisions.
www.bankofengland.co.uk
Nationwide reduces mortgage rates following Bank Rate cut
News from the Nationwide Building Society
www.nationwidemediacentre.co.uk
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Reeves hit by gloomy growth forecast despite interest rate cut
The Bank of England has cut interest rates by 0.25 per cent to 4.5 per cent but downgraded forecasts on growth
www.independent.co.uk
What does the Bank of England interest rate cut mean for mortgages and savings?
Decision will lead to lower borrowing costs for those on trackers – but fixed-rate deals will stay the same
www.theguardian.com