Bank of England cuts interest rates by 0.25 per cent

The Bank of England has reduced interest rates to 4.25 per cent, following the Monetary Policy Committee’s (MPC’s) majority vote of five to four.

The MPC said: “Based on the Committee’s evolving view of the medium-term outlook for inflation, a gradual and careful approach to the further withdrawal of monetary-policy restraint remains appropriate.

“The Committee will continue to monitor closely the risks of inflation persistence and what the evidence may reveal about the balance between aggregate supply and demand in the economy.

“Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the two per cent target in the medium term have dissipated further. The Committee will decide the appropriate degree of monetary policy restrictiveness at each meeting.”

Commenting on the rate cut, Bob Duncan, managing director of Rettie Financial Services said: “A base-rate cut to 4.25 per cent will be welcome news for many homebuyers and homeowners across Edinburgh.

“Confidence has already been returning to the market in recent months, and a rate reduction should help further ease affordability pressures particularly for first-time buyers and those coming off higher fixed-rate deals post Covid.

“While we may not see an immediate drop in mortgage rates across the board, this is a clear signal that we’re moving in the right direction, and it could encourage more buyers to make their move this spring.

“We’re already seeing clients being more optimistic about their options, and a cut like this is likely to reinforce that growing sense of confidence.”

www.rettie.co.uk/financial-services