Base Rate Cut Comment from Afin Bank

06 February 2025

Following today's Base Rate announcement by the Bank of England, Alan Davison, Chief Commercial Officer of Afin Bank, commented:

“Today’s 25bps cut to the Base Rate is no surprise, as lenders had already started pricing it into their fixed products. But I wonder if the Bank of England’s Monetary Policy Committee would have preferred another a week or so to ponder its decision given the impending risk of global economic turmoil sparked by Donald Trump’s threatened trade tariffs.

“For the time being, lower mortgage rates will be welcomed by borrowers looking to buy or remortgage soon, particularly those hoping to beat the lowering of the stamp duty threshold on 1st April.

“Whether there are more base rate drops in the pipeline and a steady fall in rates, as some commentators predicted at the end of last year, remains to be seen. Inflation is stubbornly high, which could be impacted further if a Trump trade war triggers worldwide price rises while also hindering our own export trade.

“I think for the market and policymakers, the next month is going to be a bit of a nail-biter.”