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Experts reveal whether Bank of England will cut interest rates this week

ended 04. August 2025

EXPERTS have shared their views on whether they think the Bank of England (BoE) will cut interest rates this week.

On Wednesday, the BoE's Monetary Policy Committee will meet, with its interest rate decision coming at midday on Thursday. 

Some financial experts expect a 0.25% cut from 4.25% to 4% - while others believe the BoE will stick at 4%.

John Woolfitt, Director at Atlantic Capital Markets, believes a cut is coming.

He said: "Given the pressure on businesses and households, particularly from rising energy costs, high mortgage payments and increased employer National Insurance contributions, it would be reasonable to consider a modest rate cut. 

"The economy is in a fragile state and most businesses are seeing stagnant demand. The UK GDP contracted in both April and May, and unemployment has climbed to around 4.7%, its highest in nearly four years. That said, inflation is still well above target, with CPI at 3.6% in June and expected to edge higher in the coming months. 

“Core and services inflation remain challenging, and public inflation expectations are up, so any move to cut would need to be carefully sized and justified. In my view, a 25 basis point cut from 4.25% down to 4% would be appropriate now. It would provide welcome breathing room for those under cost pressure, while still respecting the need to steer inflation toward 2% over the medium term.”

Keith Budden, Managing Director at Ensurety, agreed, adding: "Given that business confidence is still on a downward trajectory, house prices are stagnant and we seem to be a hair's breadth away from recession, I really hope the Bank of England will cut interest rates by another 0.25% on Thursday. 

“I strongly believe that they will, although I suspect this could be the final drop in interest rates this year as the Bank of England will doubtless want to steady the ship in the final quarter of the calendar year - especially given that consumer spending traditionally markedly increases in that quarter.”

Tony Redondo, Founder at Cosmos Currency Exchange, said a cut is needed because of what he sees in his local area.

He continued: "The Bank of England should cut rates by at least 0.25% to ease Cornwall’s household and business pressures amid high costs and weak demand. With the UK's GDP contracting, unemployment at 4.7%, and inflation at 3.6% but expected to fall, a cut supports growth without fuelling inflation. 

"Markets see a 90% chance of a cut, though some MPC members may hold due to inflation fears. Cornwall’s economy is struggling. Tourism numbers are down, including in Truro and St Ives, and cautious visitors are cutting back on their spending, hitting local cafes and shops. 

“High streets are facing closures, and SMEs, such as local trades, are pausing investment due to tax hikes and tariff concerns. Fishing, farming, and rural communities are downbeat, but Newquay’s tech startups show resilience where innovation or export markets remain strong.”

Rohit Kohli, Director at The Mortgage Stop, said businesses are desperate for a rates cut.

He added: “The Bank of England needs to cut rates now. Households and especially businesses have been squeezed to the limit, and the government’s handling of the economy is disjointed and ineffective. The Chancellor is out of her depth. Without competent leadership from the government, the Bank must take the lead - because caution is now actively holding us back. 

"Across Romsey and Southampton, businesses are under real pressure. From conversations with fellow business owners, recruitment is being frozen, investment plans are shelved, and many are still struggling to offset the national insurance hike. Some are even reducing headcount. 

"The so-called growth agenda is invisible - no one can see how the government plans to build confidence or cut costs. It’s just one blow after another. The Bank of England has a clear choice this week: cut rates or risk deepening the economic freeze gripping the South Coast.”

Sam Kirk, Managing Director at J-Flex Rubber Products, said: “Whilst many businesses across the East Midlands appear to be busier, the cost pressures as a result of increased NI and Minimum Wage means there is still a cautious undertone when it comes to investment. I'd certainly encourage the Bank of England to cut interest rates, however it will take much more than a rate cut to jump start the economy.”

Though some financial experts believe the BoE will not cut rates on Thursday.

Ranald Mitchell, Director at Charwin Mortgages, said: “With inflation ticking up, the Bank of England will likely hold at 4.25%, but that doesn’t mean it should. Inflation isn’t the only threat. Households are still under pressure, and many businesses are caught between rising costs and falling demand. 

"Locally, firms are cautious, delaying investment and scaling back plans. The mood is survival, not growth. Holding may look sensible in theory, but in practice it risks stagnation. A modest rate cut would show the Bank understands the full picture and not just the inflation stats, but the strain on the real economy. Confidence needs a signal, not silence.”

Anita Wright, Chartered Financial Planner at Ribble Wealth Management, agreed, adding: "Despite mounting economic pressures, I expect the MPC to act cautiously and hold rates steady this week. The MPC is likely constrained by lingering inflation risks—particularly in core goods and services—despite a softening headline rate. 

"Recent fiscal measures, including public sector pay rises and VAT on private education, may further fuel cost-push inflation. Moreover, with a substantial share of UK gilts held by foreign investors, a rate cut could trigger a gilt sell-off, raise yields, inflate government debt costs, and erode confidence in Sterling. 

“There is also a political factor: given the government’s fiscal missteps—such as wealth taxes and policies driving capital abroad —the MPC may be reluctant to be seen as enabling irresponsible spending through monetary easing. While a rate cut is warranted to support a weakening economy, it is likely to delay action until disinflation and economic deterioration are more pronounced. However, this caution risks deepening the downturn.”

Samuel Mather-Holgate, Independent Financial Adviser at Mather and Murray Financial, said: “The Bank should cut rates to ease pressure for households, but for years they have been behind the curve and I expect the same here. Andrew Bailey always choose cautious over confidence and keeping rates on hold will be the likely outcome.”

10 responses from the Newspage community

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John Woolfitt
Director at Atlantic Capital Markets
Given the pressure on businesses and households, particularly from rising energy costs, high mortgage payments, and increased employer National Insurance contributions it would be reasonable to consider a modest rate cut. The economy is in a fragile state and most businesses are seeing stagnant demand, the UK GDP contracted in both April and May, and unemployment has climbed to around 4.7%, its highest in nearly four years. That said, inflation is still well above target, with CPI at 3.6% in June and expected to edge higher in the coming months. Core and services inflation remain challenging, and public inflation expectations are up, So any move to cut would need to be carefully sized and justified. In my view, a 25 basis point cut from 4.25% down to 4.00% would be appropriate now. It would provide welcome breathing room for those under cost pressure, while still respecting the need to steer inflation toward 2% over the medium term.
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Keith Budden
Managing Director at Ensurety
Given that business confidence is still on a downward trajectory, house prices are stagnant and we seem to be a hair's breadth away from recession, I really hope the Bank of England will cut interest rates by another 0.25% on Thursday.

I strongly believe that they will, although, I suspect this could be the final drop in interest rates this year as the Bank of England will doubtless want to steady the ship in the final quarter of the calendar year (especially given that consumer spending traditionally markedly increases in that quarter).
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Editor
Tony Redondo
Founder at Cosmos Currency Exchange
The Bank of England should cut rates by at least 0.25% to ease Cornwall’s household and business pressures amid high costs and weak demand. With the UK's GDP contracting, unemployment at 4.7%, and inflation at 3.6% but expected to fall, a cut supports growth without fuelling inflation. Markets see a 90% chance of a cut, though some MPC members may hold due to inflation fears. Cornwall’s economy is struggling. Tourism numbers are down, including in Truro and St Ives, and cautious visitors are cutting back on their spending, hitting local cafes and shops. High streets are facing closures, and SMEs, such as local trades, are pausing investment due to tax hikes and tariff concerns. Fishing, farming, and rural communities are downbeat, but Newquay’s tech startups show resilience where innovation or export markets remain strong.
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Editor
Rohit Kohli
Director at The Mortgage Stop
The Bank of England needs to cut rates now. Households and especially businesses have been squeezed to the limit, and the government’s handling of the economy is disjointed and ineffective. The Chancellor is out of her depth. Without competetant leadershiop from the governemtn, the Bank must take the lead - because caution is now actively holding us back. Across Romsey and Southampton, businesses are under real pressure. From conversations with fellow business owners, recruitment is being frozen, investment plans are shelved, and many are still struggling to offset the national insurance hike. Some are even reducing headcount. The so-called growth agenda is invisible - no one can see how the government plans to build confidence or cut costs. It’s just one blow after another. The Bank of England has a clear choice this week: cut rates or risk deepening the economic freeze gripping the South Coast.
Copy

Editor
Anita Wright
Chartered Financial Planner at Ribble Wealth Management
Despite mounting economic pressures, I expect the MPC to act cautiously and hold rates steady this week. The MPC is likely constrained by lingering inflation risks—particularly in core goods and services—despite a softening headline rate. Recent fiscal measures, including public sector pay rises and VAT on private education, may further fuel cost-push inflation. Moreover, with a substantial share of UK gilts held by foreign investors, a rate cut could trigger a gilt sell-off, raise yields, inflate government debt costs, and erode confidence in Sterling. There is also a political factor: given the government’s fiscal missteps—such as wealth taxes and policies driving capital abroad —the MPC may be reluctant to be seen as enabling irresponsible spending through monetary easing. While a rate cut is warranted to support a weakening economy, it is likely to delay action until disinflation and economic deterioration are more pronounced. However, this caution risks deepening the downturn.
Copy

Editor
Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
With inflation ticking up, the Bank of England will likely hold at 4.25%, but that doesn’t mean it should. Inflation isn’t the only threat. Households are still under pressure, and many businesses are caught between rising costs and falling demand. Locally, firms are cautious, delaying investment and scaling back plans. The mood is survival, not growth. Holding may look sensible in theory, but in practice it risks stagnation. A modest rate cut would show the Bank understands the full picture and not just the inflation stats, but the strain on the real economy. Confidence needs a signal, not silence.
Copy

Editor
Samuel Mather-Holgate
Managing Director & IFA at Mather and Murray Financial
The Bank should cut rates to ease pressure for households, but for years they have been behind the curve and I expect the same here. Andrew Bailey always choose cautious over confidence and keeping rates on hold will be the likely outcome.
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Editor
Scott Gallacher
Director at Rowley Turton
Here in Leicester, the mood is pretty bleak. The cost-of-living crisis is biting hard, the Covid savings cushion is long gone, and many young people — including my children’s friends — are struggling to find jobs after school or university. Even Leicester City have been relegated and start the new season in the Championship facing a points deduction. That sums it up: the pressure is everywhere.

The Bank of England needs to recognise that for most households and businesses, things aren’t just tough — they’re worsening. Holding rates high risks deepening the stagnation. A small rate cut might not solve everything, but it could help ease the pain and restore some much-needed confidence.
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Kundan Bhaduri
Entrepreneur, Investor and Landlord at The Kushman Group
The Bank of England wants to treat hypothermia with an ice bath. The evidence for a substantial cut is overwhelming. Manufacturing output has contracted for 15 consecutive months, small business confidence has plummeted to levels not seen since the Truss administration, and property transactions across Kent have fallen by 23% since January. The market has already priced in a quarter point reduction, with 93% of traders betting on easing this Thursday. Yet our central bankers seem more concerned with maintaining their inflation fighting credentials than preventing an entirely avoidable recession.

The mood among Kent's businesses carries all the optimism of a funeral director's convention. My fellow developers have shelved projects, retailers are closing their doors, and the only growth industry appears to be insolvency practitioners. The Bank will likely deliver a timid 0.25% reduction to 4%, accompanied by carefully crafted warnings, but who cares to read that garble at this point?
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Sam Kirk
Managing Director at J-Flex Rubber Products
Whilst many businesses across the East Midlands appear to be busier, the cost pressures as a result of increased NI and Minimum Wage means there is still a cautious undertone when it comes to investment. I'd certainly encourage the Bank of England to cut interest rates, however it will take much more than a rate cut to jump start the economy.