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Should the Bank of England cut rates next month?

ended 15. November 2024

The UK economy is struggling, registering growth of just 0.1% in the third quarter. Meanwhile, the markets are pricing in interest rates staying higher for longer due to the Budget. In your opinion, should the Bank of England now cut rates in December to try and get the economy firing?

6 responses from the Newspage community

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Jed Newton
Director at Trinity Financial
The economy is crying out for cheaper mortgage rates despite concerns about inflation. The new GDP data shows we have pretty much zero growth again and the economy is flatlining. Businesses and consumers would benefit from cheaper debt and lower accommodation costs, and if consumers had some spare money to spend, that would have a beneficial effect on the economy. The only way mortgage rates are going to be more affordable is if the Bank of England base rate comes down.
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Jack Tutton
Director at SJ Mortgages
The UK economy needs some stimulus to help it start growing again, and the Chancellor's Budget last month did little to help. However, the Bank of England could give the economy the jump start it desperately needs by cutting the base rate next month, giving mortgages holders in particular some much-needed positivity before Christmas and into 2025. The last couple of weeks, since the last meeting, has been confusing for people. Many people we have spoken with expected mortgage rates to reduce in line with the base rate. In reality, the complete opposite has happened much to people's dismay and leaving them concerned as to what next year may look like.
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Elliott Culley
Director at Switch Mortgage Finance
The long slog with the UK's economy stagnating continues with no end in sight. When growth is stagnant, interest rates are usually cut to try and stimulate the economy. However even when we had low rates previosuly the economy did not recover. Reducing interest rates can help but is by no means the silver bullet to all the problems in the economy. With inflation and costs predicted to increase in the short term, it's unlikely the Bank of England will loosen the shackles after only just getting inflation back within target.
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Lee Gathercole
Co-Founder at Rebus Financial Services
The latest GDP growth figures and slightly better-than-expected inflation data, combined with the recent increase in stamp duty and the removal of the temporary stamp duty incentive for first-time buyers, mean we urgently need measures to stimulate the housing market. A decrease in interest rates in December could be the key to preventing the property market from stagnating.
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Iain Swatton
Director at Exemplar Financial Services
The UK economy is clearly facing challenges, with growth stalling at just 0.1% in the third quarter. At the same time, financial markets are pricing in the likelihood of interest rates remaining higher for longer, influenced by the recent Budget's impact on inflationary pressures. This situation calls for decisive action from the Bank of England. A rate cut in December could inject much-needed momentum into the economy, fostering confidence and encouraging investment. While inflation remains a concern, the current trajectory risks tipping into stagnation or even recession. Prioritising economic growth through proactive measures would be a better outcome than tolerating prolonged periods of negligible progress.
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Graham Cox
Director at Bridging Hub
Growth of 0.1% is anaemic. With the UK economy flatlining, a further base rate cut in December would provide a much-needed boost, but I feel it's unlikely. The Bank of England governor Andrew Bailey has already signalled a more gradual approach to lowering rates and the MPC will be mindful of the inflationary effects of the Budget. Rising business costs are likely to be passed onto the consumer.