Bank of England base rate cut for first time in over four years

by Aaron Strutt

Aug 01 2024

The Bank of England base rate has finally been cut for the first time in more than four years.

In a closely-run decision, rates were lowered to 5% from 5.25% on Thursday, marking the first reduction since the start of the pandemic in March 2020.

At its meeting ending on 31 July 2024, the Monetary Policy Committee voted by a majority of 5–4 to reduce Bank Rate by 0.25 percentage points, to 5%. Four members preferred to maintain Bank Rate at 5.25%.

Andrew Bailey, governor of the Bank of England, said policymakers needed "to make sure inflation stays low and be careful not to cut interest rates too quickly or by too much”.

Cheaper mortgage rates

Mortgage rates have been coming down in recent weeks, and there are more competitively priced rates available. Nationwide for Intermediaries launched the first sub-4% five-year fix we have seen in a while, and some two-year fixes are priced around 4.4%.

It is not unreasonable to expect mortgage rates to get cheaper over the coming weeks. The Bank of England's governor said a decision to cut interest rates is “an important moment in time” but warned people not to expect a sharp fall in the coming months.

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The information contained within was correct at the time of publication but is subject to change.

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