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When could the Bank of England cut rates following Andrew Bailey's comments?

ended 03. October 2024

Bank of England governor, Andrew Bailey, has hinted that rate cuts could come sooner if inflation remains under control. Newspage asked experts for their views on when that next rate cut could come,  how much lower Bank rate could go — and how that could impact mortgage rates. Their views are below.

14 responses from the Newspage community

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Gabriel McKeown
Head of Macroeconomics at Sad Rabbit - Substack Newsletter
With the latest comments from Bailey opening the floodgates to more aggressive rate cuts on the horizon, the UK economy may find itself surfing a wave of monetary policy change. These new views mark a significant departure from previous expectations and Bailey's earlier comments advocating a gradual approach to rate reductions. While it's challenging to predict the exact timing and magnitude of future rate cuts, if inflationary pressures continue to dissipate, we could see the base rate fall below 4% by the end of 2025, with the potential for a return to sub-3% levels in the near future. However, it's important to note that geopolitical tensions, particularly in the Middle East, pose a risk to this outlook. Furthermore, the BoE must navigate carefully between supporting growth and maintaining price stability. For now, the UK's monetary policy ship appears to be changing course, with Captain Bailey signalling full steam ahead towards more aggressive rate reductions.
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Adam Stiles
Managing Director at Helix Financial Partners
Andrew Bailey hinting at rate cuts coming sooner is excellent news for the mortgage and property industry and a clear signal to lenders to follow suit with rate cuts. We'd expect to see SWAP rates drop on the back of this hint with lenders dropping rates further as this is how they price fixed rates. A November rate cut looks extremely likely now, which will lower tracker rates.
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David Belle
Founder and Trader at Fink Money
This is welcome news in my view, as the government is flapping all over the place, Bailey cutting rates quickly will lead to lower debt servicing costs, ultimately fixing the ‘black hole’ the treasury has conjured up. 50bps is sort of priced by the market although it’s dithering a little. Perhaps more comment over the next week or two will solidify a 50bps cut — it’s NOT required though, and perhaps could be smarter to go along with what the Fed does so the market doesn’t get spooked and ask ‘what are you seeing that we aren’t, Mr Bailey?’

Short answer, they’ll cut in line with the Fed or just before although I don’t believe 50bps is at all necessary.
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Katy Eatenton
Mortgage & Protection Specialist at Eatenton Finance
4.5% would be a nice end to the year. Lenders are already pricing in reductions to end the year on as profitable a note as possible. If a reduction. Is guaranteed, why wait until December, if the base rate drops in November it will still give people time to purchase before the stamp duty changes in March.
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Craig Fish
Director at Lodestone Mortgages
With tensions in the Middle East as well as rising oil and fuel prices, inflation could continue to have an impact on any rate reductions. Whilst a cut in November is expected, it’s not set in stone.
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Rohit Kohli
Director at The Mortgage Stop
As we approach the festive season, many in the mortgage industry are hopeful for an early Christmas present from Andrew Bailey and his MPC elves. A 25bps rate cut could be the stocking filler homeowners are wishing for, helping to ease financial pressures. However, if the Bank of England truly wants to give the economy a larger gift, a 0.5% cut before Christmas could offer a timely boost to retail sales, traditionally seen as a key indicator of the country's economic health. It's clear that the time for festive chatter from the Bank is over — what we need now is some real Christmas cheer in the form of action.
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Aaron Strutt
Product and Communications Director at Trinity Financial
Many potential borrowers have been holding off buying a property, moving and even remortgaging until the Bank of England base rate starts to come down. They expect fixed rates to get cheaper when the Monetary Policy Committee takes action. A combination of the base rate being too high and the upcoming budget is slowing down the property market.
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Riz Malik
Independent Financial Adviser at R3 Wealth
We could finish 2024 with 0.5% off the Bank of England base rate, which could be great news for borrowers and businesses entering the new year. The Fed and ECB have indicated there are rate cuts ahead and we do not want to stick out like a sore thumb.
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Jack Tutton
Director at SJ Mortgages
All signs point to a cut in the base rate next month, many market experts pricing in a cut in both November and December. As we approach the end of the year, mortgage lenders will want to start generating business for next year. Factoring Andrew Bailey comments and speaking so openly about base rate cuts being on the horizon, potentially before the year is out, we will hopefully see some significant cuts in lenders rates shortly. All of this will be much needed relief to mortgage holders or people who hope to buy before the stamp duty changes that are due to come into effect in April.
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Tony Castle
Managing Director at PFG Mortgages
It was widely expected we may not see a base rate cut till December but today’s news has certainly ‘thrown the cat amongst the pigeons’. This could be a welcome boost for homeowners and buyers for the end of this year and start of next. I’m sure a lot of people purchasing at the moment will be waiting to see how much more the BOE with the “aggressive approach”.
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Elliott Benson
Owner at Sett Mortgages
It's looking like a 25bps rate cut is coming in November, and about time too! The MPC will do what they should have done in September, which will hopefully keep up the momentum on these fixed rate cuts.
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Lee Gathercole
Co-Founder at Rebus Financial Services
I think we could expect at least one rate cut before the end of the year, perhaps even two. The inflation data so far seems better than anticipated, so its about time we relieved some pressure on current homeowners.
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Iain Swatton
Director at Exemplar Financial Services
Bank of England Governor Andrew Bailey has hinted at rate cuts — perhaps he’s eager to get ahead of the curve after some recent criticism about being a bit slow on the draw. I expect the first cut could come as early as November, possibly dropping by 0.5%. We may see further cuts throughout 2025, with the base rate potentially hitting 3.75%. Combined with lenders in a price war, this is great news for mortgage rates, making it a perfect time for buyers and those looking to remortgage.
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Kim McGinley
Director & Specialist Broker at VIBE Finance
If inflation stays under control, it would be great to see another one, dare I say it — two rate drops by the end of the year. To get into the 4% range by then would be amazing and would really give 2025 the kickstart it needs.

It would offer some much needed relief for borrowers and it will set a positive tone going into 2025. The ultra low rates that we saw in previous years are a thing of the past but to get some momentum on these decreases would be amazing for the market. Fingers crossed for some good news!