Summary
Policymakers at the Bank of England are expected to reduce the interest rate from 4% to 3.75%. This decision is influenced by a drop in inflation rates and economic concerns, and it will affect mortgage payments and savings account returns.
Key Facts
- The Bank of England is likely to lower the interest rate to its lowest level since February 2023.
- Analysts predict a cut from 4% to 3.75%, though not all committee members agree.
- This potential cut would be the sixth since August of last year.
- The Bank's goal is to maintain inflation at 2%, using the interest rate as a key tool.
- The Consumer Prices Index (CPI) inflation rate fell from 3.6% in October to 3.2% in November.
- A 0.25 percentage point cut could save certain homeowners £29 a month on mortgage repayments.
- Savers might see reduced returns on savings due to lower interest rates.
- There is a possibility of further interest rate reductions in early next year according to some forecasts.
