When will interest rates go down again?
Summary
The Bank of England might lower interest rates soon, with further reductions expected over the year. Interest rates impact costs for mortgages, credit cards, and savings. The decision depends on inflation and economic performance both in the UK and globally.Key Facts
- The Bank of England's current interest rate is 4.5%, set in February.
- Interest rates influence how much it costs to borrow money and how much can be earned on savings.
- The Bank adjusts rates to manage inflation, aiming for a 2% target.
- Inflation was at 2.6% in March 2025, slightly under previous levels but above the 2% target.
- Changes in interest rates immediately affect about 600,000 homeowners with mortgages linked to the Bank's rate.
- Most mortgages have fixed rates, with changes impacting new deal costs rather than immediate monthly payments.
- Current average mortgage rates are higher compared to much of the last decade.
- Global economic issues, like US tariffs, also inform interest rate decisions.
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