The Bank of England has cut interest rates for the second time this year, in good news for mortgage-holders and other borrowers.
Policymakers at the Bank of England opted to reduce interest rates to 4.75 per cent today, down from 5 per cent. They had also been cut by 0.25 percentage points in August, which marked the first reduction since 2020, before being kept the same in September.
Chancellor Rachel Reeves has welcomed the decision to cut interest rates to 4.75%, but says she is “under no illusion about the scale of the challenge facing households”.
She repeated that her first Budget has set out how the government has taken decisions to “fix the foundations to deliver change by investing in the NHS and rebuilding Britain”.
Inflation – which measures the pace of price rises – fell below the Bank of England’s 2% target in the year to September but is, and always was, expected to rise again as energy bills increase in the colder months.
It was then forecast to drop back to 2% by 2026 but the Bank now expects that to happen in the following year.
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