Bank of England expected to cut interest rates

The UK interest rates are expected to be widely deducted on Thursday, leading to the lowest level of borrowing costs for more than two years.

Financial markets estimate that the Bank of England will reduce the interest rates in the fifth cut since last August at 4.25%, taking it the lowest since March 2023.

A low base rate may reduce the monthly mortgage cost for some household owners, but it also means a small return for savings.

Bank of England will also publish its forecasts An economy that failed to grow in April and May , Potential The government which can opt for filling the autumn budget by announcing the tax increase.

The next week, the data will be released on how the UK economy performed between April and June for national statistics.

It increased 0.7% in the first three months of the year.

If the bank trims the rates, the repayment on the average standard variable rate mortgage of £ 250,000 in 25 years will fall from £ 40 per month, according to the moneyfacts.

The financial data firm said that for the saves, the average return rate will decrease from 3.9% to 3.5% in August last year.

Rachel Springle, finance expert at Moneyfacts, said, “Savings rates are deteriorating and any base rate cut will be more sad for saver.”

Interest rates are expected to be cut despite inflation – which measures the speed of growing price – climb above the 2% target of Bank of England.

In the year in June, Inflation increased to 3.6% With high cost of food and clothes -due to air and rail travel.

However, there are indications that the UK’s employment market is getting cold that can weigh on inflation.

Recent data suggests that the number of people on parole is falling, the vacancies are less and the unemployed rate is high.

Meanwhile, annual growth in average regular earnings, except for bonuses, Slow up to 5% between March and May.

Employers are facing high cost, including an increase in national insurance contribution and national minimum wages.

We will bring you live reporting from the bank when we make a decision in 1200 as well as expert analysis -what does it mean for you and your money.