Are we expecting BOE to remain at 4.75% on 8th February 2025?

RelievedSheff

movilogo said:

My crystal ball says rates will remain at 4.75% in December 2024.
By mid to late next year rates may hover around 4.50% to 4.25%. Don't expect below 4.25% in 2025.

I think you are bang on the money there.

Unless there is some major economic upheaval waiting in the wings!

Maka344

RelievedSheff said:

movilogo said:

My crystal ball says rates will remain at 4.75% in December 2024.
By mid to late next year rates may hover around 4.50% to 4.25%. Don't expect below 4.25% in 2025.

I think you are bang on the money there.

Unless there is some major economic upheaval waiting in the wings!

What about into 2026? We’ve got two mortgage options on the table:

1. A 2-year fix at 4.10%, which is around £300 cheaper per month compared to the tracker.

2. A 2-year tracker, currently at 0.15% above base rate, making it 4.90% right now.

Before the recent budget, the tracker seemed like the better option. However, with talk of US tariffs potentially driving up global inflation and the BoE signaling a preference for gradual rate cuts rather than aggressive ones, I’m starting to second-guess.

The big question: What’s the general consensus right now—fix or tracker? Most predictions suggest we could see 3–4 base rate cuts next year, potentially dropping the base rate to around 3.75–4%. That would bring the tracker in line with the fixed rate by the end of 2025. But looking at the full 2 years, the tracker could still work out cheaper overall if rates drop further in 2026.

RelievedSheff

Maka344 said:

RelievedSheff said:

movilogo said:

My crystal ball says rates will remain at 4.75% in December 2024.
By mid to late next year rates may hover around 4.50% to 4.25%. Don't expect below 4.25% in 2025.

I think you are bang on the money there.

Unless there is some major economic upheaval waiting in the wings!

What about into 2026? We’ve got two mortgage options on the table:

1. A 2-year fix at 4.10%, which is around £300 cheaper per month compared to the tracker.

2. A 2-year tracker, currently at 0.15% above base rate, making it 4.90% right now.

Before the recent budget, the tracker seemed like the better option. However, with talk of US tariffs potentially driving up global inflation and the BoE signaling a preference for gradual rate cuts rather than aggressive ones, I’m starting to second-guess.

The big question: What’s the general consensus right now—fix or tracker? Most predictions suggest we could see 3–4 base rate cuts next year, potentially dropping the base rate to around 3.75–4%. That would bring the tracker in line with the fixed rate by the end of 2025. But looking at the full 2 years, the tracker could still work out cheaper overall if rates drop further in 2026.

I don't see interest rates (and mortgage rates) going much lower in the next few years unless we have some new form of economic crisis.

People have been spoiled with super low interest rates the last decade or more. It's time to realise that wasn't "normal" and get rates back to the long term average.

I can't really comment on what you should do. That is your choice to make.

movilogo

The big question to ask whether you are going to make substantial overpayment. Trackers usually have no limits on overpayment. If you don't plan to do that, then you just need to make a call. No one can predict future what will happen.

ReadySteadyPop

RelievedSheff said:

I think they will hold rates in December.

I think they will cut in anticipation of problems from U.S tariffs, but will be forced to raise again at some point next year, there is likely to be market volatility which will push mortgage rates up anyway in my opinion.

lojo1000

ReadySteadyPop said:

RelievedSheff said:

I think they will hold rates in December.

I think they will cut in anticipation of problems from U.S tariffs, but will be forced to raise again at some point next year, there is likely to be market volatility which will push mortgage rates up anyway in my opinion.

Interesting, often the quick thought is that tariffs raise prices and hence are inflationary. But, of course, it could lead to job losses, lack of confidence and have a deflationary impact.

We don't know what will happen and what decisions will be made by all the vested interests. 

I think the global economy stagnates unless there is a strong infusion of debt from somewhere/everywhere. With yields rising in Japan, US and now across Europe, that does not seem likely.

Not sure what Bailey, et al do in the meantime but I know it will have no material impact on the longer term. They should retire the MPC.

Strummer22

lojo1000 said:

Not sure what Bailey, et al do in the meantime but I know it will have no material impact on the longer term. They should retire the MPC.

Well then what we will talk about? 

Hoenir

lojo1000 said:

ReadySteadyPop said:

RelievedSheff said:

I think they will hold rates in December.

I think they will cut in anticipation of problems from U.S tariffs, but will be forced to raise again at some point next year, there is likely to be market volatility which will push mortgage rates up anyway in my opinion.

Not sure what Bailey, et al do in the meantime but I know it will have no material impact on the longer term. They should retire the MPC.

Fulfill their mandates of reducing inflation and maintaining financial stability. They are looking constantly into the future. Months in advance. As interest rate changes take 18 months to impact the real economy. Far removed from the news headlines that dominate the discussion on social media. 

lojo1000

Hoenir said:

lojo1000 said:

ReadySteadyPop said:

RelievedSheff said:

I think they will hold rates in December.

I think they will cut in anticipation of problems from U.S tariffs, but will be forced to raise again at some point next year, there is likely to be market volatility which will push mortgage rates up anyway in my opinion.

Not sure what Bailey, et al do in the meantime but I know it will have no material impact on the longer term. They should retire the MPC.

Fulfill their mandates of reducing inflation and maintaining financial stability. They are looking constantly into the future. Months in advance. As interest rate changes take 18 months to impact the real economy. Far removed from the news headlines that dominate the discussion on social media. 

Sounds like something the MPC would say.

lojo1000

Looking further ahead than the "months" @Hoenir thinks the MPC looks....

I see China needing to sell their cars abroad. I see German manufacturing industry slowing dying. I see downward pressure on wages......I see tariffs and quotas rising globally and cross-border supply constrained.

To combat this, I see central banks once again thinking they need to expand the money supply and cut interest rates.

ergo, I see inflation re-emerging in 2025 and most importantly I see inflation expectations rising and investors will hide in hard assets. The assets most difficult to value will rise the most.