The Bank of England is expected to cut interest rates again this year in what would be a welcome move for buyers, sellers and estate agents.
UK estate agents have already reported more buyer interest after last month’s BoE rate cut, with buyer enquiries increasing significantly in recent weeks.
At the meeting last month, the Monetary Policy Committee cut the Bank Rate to 5% from a 16-year high of 5.25%, in a tight 5-4 vote. But governor Andrew Bailey emphasized “careful” reductions in borrowing costs going forward.
The Bank of England will keep its main interest rate at 5% next week but reduce it in November even though inflation is expected to stay above the central bank’s 2% target, a firm majority of economists in a Reuters poll said.
All 65 economists in the Sept. 6-11 poll predicted the Bank Rate will be left at 5% next week.
Nearly 80% of economists, 49 of 65, expected one more cut this year. While 48 predicted it in November, one said December. The other 16 saw two more rate cuts this year.
Interest rate futures are pricing in two more cuts, in November and December, to put the end-year rate at 4.5%.
Monica George Michail, associate economist for the National Institute of Economic and Social Research, highlighted that services sector pay fell faster than expected to 3.8% compared to an average of 5.9% in the first five months of this year.
“This is positive news for inflation and might provide the Bank of England with increased confidence regarding interest rate cuts,” she said.
Source: Marc Da Silva, 12.09.24, Property Industry Eye.
