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When will the first rate cut come? 20 financial services experts share their views

ended 22. March 2024

After yesterday's hold by the Bank of England and Governor, Andrew Bailey, saying rate cuts are ‘in play’, Newspage asked 20 financial services experts when they think the first rate cut will come.

One said: “Despite all the positive signs around inflation this week and a more dovish Monetary Policy Committee, when the chips are down the Bank of England could still be slow to react.”

Another added: “The first cut in the base rate seems set to come as soon as May. With the US Fed indicating three rate cuts this year, our weaker economy could see four delivered, taking the base rate down to 4.25%."

Their views are below.

19 responses from the Newspage community

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Stephen Perkins
Managing Director at Yellow Brick Mortgages
Despite all the positive signs around inflation this week and a more dovish Monetary Policy Committee, when the chips are down the Bank of England could still be slow to react. Threadneedle Street generally looks across the pond to the US Federal Reserve to lead the way. With 8 votes for a hold and only a solitary voice in the rate reduction choir, we could get a cut in May but this could be too little too late for many households and businesses already on the brink.
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Katy Eatenton
Mortgage & Protection Specialist at Eatenton Finance
We needed a rate cut yesterday, but I don’t envisage one until mid to late summer unfortunately, despite the dovish narrative emerging from Threadneedle Street yesterday.
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Rob Gill
Managing Director at Altura Mortgage Finance
The first cut in the base rate seems set to come as soon as May. With the US Fed indicating three rate cuts this year, our weaker economy could see four delivered, taking the base rate down to 4.25%.
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Ross McMillan
Owner/Mortgage Advisor at Blue Fish Mortgage Solutions
Common sense and various sustained economic data would suggest that the next opportunity in May to cut rates should be grasped with gusto. You can't always get what you want, though, and with Andrew Bailey and his cautious cohorts at the helm, it sadly appears more likely that we may not get what the UK economy and beleaguered borrowers desperately need until we are deep into the Summer.
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Richard Thompson
Director at Abbeydale Mortgages
I expect a reduction of 0.25% in the base rate at the next meeting in May. This projection is largely influenced by the recent decline in swap rates and the notable drop in inflation to 3.4% in March. I firmly believe a cut is needed not just to alleviate the pain of borrowers but to stimulate consumer spending on the high street. Looking ahead, I am optimistic about the possibility of a continued decrease in inflation next month. Should this materialise, it will undoubtedly exert considerable pressure on the Bank of England to implement a base rate reduction.
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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
Members of the Bank’s Monetary Policy Committee seem completely unable to see the pain being inflicted on homeowners and businesses by higher rates. They are obsessed with inflation and getting it down. The first rate cut won’t come until August, at the next big meeting. When cuts do arrive, they might come quick as they also won’t want to suck deflation. They risk is a yo-yo effect as the bank is so backwards-looking that they don’t anticipate, which leads to over-corrections in policy.
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Craig Fish
Director at Lodestone Mortgages
The next rate cut should come in June, if the decision makers in Threadneedle street want to retain what little remaining credibility they have. For once they need to put on their big boy pants and make a decision for the good of the UK, and stop playing follow the leader with the Fed. To delay the decision to cut could be the final nail in the coffin for the UK economy.
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Dariusz Karpowicz
Director at Albion Financial Advice
Following the Bank of England's recent decision to hold rates and Governor Andrew Bailey's remarks that rate cuts are on the table, the anticipation for monetary easing has intensified. Chances of a cut have been further bolstered by the latest data revealing a stagnation in retail sales for February, underscoring the economy's pressing need for stimulus. If we navigate the coming period without major disruptions and inflation either stabilises or declines, it's plausible to expect a rate reduction within the next three Monetary Policy Committee sessions. This potential move could mark a pivotal shift in the economic landscape, providing the necessary impetus for growth. The markets may be on the cusp of change.
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Rohit Kohli
Director at The Mortgage Stop
This Monetary Policy Committee have shown they aren’t prepared to take any risks despite all the stats crying out for a rate cut now. I would suggest the best case for a cut is June if inflation hits, or is close to, 2% in May and holds steady in June. However I would welcome an earlier cut in May.
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Justin Moy
Managing Director at EHF Mortgages
We will have to wait a little longer for a base rate cut. The Bank of England are conceding possession and will only be brave to break once the US Fed make their move. June fits that plan, but the positivity should start now, with fixed rates reversing and starting to reduce over the coming days. The words spoke much louder than the unchanged base rate decision, and markets should react with some Easter cheer.
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Simon Bridgland
Director at Charwin Private Clients
At this point, the Monetary Policy Committee are like pubescent kids nervously hanging around the edge of the dance floor. They need to take the plunge and dance the country away into the night with lower interest rates. I can’t see this happening just yet, but probably when the Government announces the date of the General Election, which means they’ll have have missed their chances of a slow and smoochy dance with the voting public.
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Bob Singh
Founder at Chess Mortgages
Despite repeated calls for rate cuts from across the economy, and all manner of economic data deteriorating, the Bank has still failed to cut. The Bank of England can't afford to allow the economy to have a crash landing, but that scenario is now possible. With the Swiss cutting their rates, the pressure is on for the UK to follow suit. How bad does it have to get for the Bank of England to start chipping away at the base rate? The first cut could come as early as May, especially if inflation moves close to target before then. This expectation will start to precipitate further rate cuts from lenders next week and may even start a rate war similar to the one we saw in January.
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Jack Tutton
Director at SJ Mortgages
The Bank of England have to be seriously considering cutting the base rate when they meet next in May. They missed a trick by not cutting it yesterday and injecting fresh confidence into the UK economy. The markets need some additional positivity, and this needs to start from the top when the Monetary Policy Committee meets again in May.
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Elliott Culley
Director at Switch Mortgage Finance
My initial prediction at the end of 2023 was May. At the time inflation was falling faster than expected and this was far enough into the year for the Bank of England to save face after saying rate drops would be at the end of 2024. Inflation cooled at the start of the year but has begun to fall quicker once again. Although May seems reasonable with an 8-1 vote yesterday in favour of holding the base rate, June is now looking more likely.
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Gareth Davies
Director at South Coast Mortgage Services
Despite all the data still pointing towards the need for a base rate cut, most notably this morning's retail sales stagnating, I’m convinced the Bank of England still won’t make a move until our cousins over the pond do. It's June at the earliest for me.
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Graham Cox
Director at Bridging Hub
My money is on a rate cut at the next Bank of England MPC meeting on May 9th. Andrew Bailey indicated yesterday that cuts could happen before inflation hits its 2% target, so it seems even he's convinced the economic pain is real and stimulus is now required.
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Ying Tan
CEO at Habito
A base rate cut is urgently needed to stimualte a stalling economy and inject some much-needed confidence into consumers and businesses. The Bank of England must act decisively and swiftly at the next meeting. Over to you, Monetary Policy Committee.
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Gary Bush
Financial Adviser at MortgageShop.com
Oh, what it must be like to sit at the top of the Bank of England like an emperor, see the country burning all around him, and make teasing comments like 'rate cuts are ‘in play’. Andrew Bailey has shocked me since taking up the reins at the Bank of England, demonstrating a clear lack of understanding of how the population of the UK is feeling in their pockets. The focus shouldn't be solely government targets, there needs to be an understanding of taxpayers suffering. We need confidence to return and a cut in rates of at least 0.25% on 9th May is what any sane person would vote for.
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Akhil Mair
Director at Our Mortgage Broker
The next base rate cut is widely considered imminent, although the Bank of England voting 8-1 to hold in March suggests a differing opinion on its timing. Markets are predicting 2-3 rate cuts starting in June, August, and October.