Santander Monthly Mortgage Market View – Frances Haque, Chief Economist at Santander UK responds to today's GDP data

14 March 2025

Frances Haque, Chief Economist at Santander UK comments:

"Today's GDP data was weaker than expected at -0.1% for January, implying households are still uncertain about the road ahead and whether to spend now. However, given real wage growth and the continuing confidence households have in their financial position, they are in the right place to kick start spending once greater stability returns.

"We saw a slight decline in house purchase approvals in January according to Bank of England data, which suggests that, while approvals remain above their pre-lockdown levels, we may not see the considerable increase most analysts were expecting ahead of April’s stamp duty changes. That said, the FCA’s recent statement around affordability rules may well result in a slightly delayed stimulus to the market, so more movement and sunnier skies could still be upon us.

“There is plenty to be watching out for in March, and we have yet to see whether February’s inflation data, labour market data and the Spring Budget - all landing over the next fortnight – will bring more clarity for households and a boost to confidence. While we expect the Bank of England to hold rates at next week's meeting, we still forecast a further three base rate cuts in 2025, with rates sitting at 3.75% at the end of the year."