Overview

• Economists widely anticipate a 25bp cut to the BoE's base rate next week, reducing it from 4.5% to 4.25%, marking the start of a rapid easing cycle.
• Predictions suggest up to five rate cuts this year, potentially lowering the base rate to 3.75% by the end of 2025, with some forecasts projecting further reductions in 2026.
• The shift in policy is driven by slowing domestic growth, downgraded GDP forecasts, and the economic impact of US President Donald Trump's tariff measures.
• The anticipated rate reductions would represent the fastest six-month decline in UK interest rates since the 2008 financial crisis, offering relief to mortgage holders with lower borrowing costs.
• Savers are advised to act quickly to lock in higher returns on fixed-rate accounts before rates drop further, while businesses and households may benefit from cheaper credit.