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

Strummer22

Maka344 said:

Strummer22 said:

Rate held at 5.25% as expected. All eyes now on the next set of economic data, particularly inflation due 15/11. 

The BoE now expects inflation to stay around 3% throughout next year, which given that their forecasts tend to reflect opposite land, should mean that we are firmly in deflation by the latter half of 2024! 

Where do you see the base rate going in that scenario? 

Best guess, around 3.5% by the end of 2024, compared to 4-4.5% if inflation falls slowly as predicted by the bank. If we do find ourselves in deflationary territory the BoE might remember being too slow to react to rising inflation in the first place and aggressively slash rates… or it might be too slow to lower rates for fear of kickstarting another inflationary cycle. We might not get deflation so we might not get to find out!

englandsrose

london21 said:

Will be sticking to 2 years fix at 5.54% with no product fees. I do feel rates will start to drop within the next 2 years.

That’s what I’ve gone with with Nationwide but have until 31st Jan to cancel switch if they do go down. 1.49 current rate you’ve been good to me, I’ll miss you. 

ReadySteadyPop

wheldcj said:

I think the damage is already done.   We are already seeing independent and well established restaurants by us closing their doors this autumn.  This seems unusual because I would imagine there is usually a decent uptick in December.   Frugality in the leisure and retail sector this Christmas could really impact sales and therefore jobs next year.   We already know the housing market is sluggish & will remain so.

If unemployment ramps up then wage growth drops as it becomes an employers market further denting consumer spending, a vicious spiral.  As has been said above mortgage and rent cost increase will bite more people in 2024 and into 2025 far more than any savings that may be made if food and fuel costs reduce (which is no certainty given the current geo-political landscape).

I think Labour & Conservatives will be fighting each other not to be in government next year. 

Rent costs seem to be easing, mortgage costs not so much.

RelievedSheff

Base rate will be held again in December.

Strummer22

RelievedSheff said:

Base rate will be held again in December.

Yeah I feel like this thread has probably run its course... barring any unexpected developments.

michaels

Strummer22 said:

RelievedSheff said:

Base rate will be held again in December.

Yeah I feel like this thread has probably run its course... barring any unexpected developments.

Where's the fun in that?

Perhaps we can instead speculate on when the first cut will be - is May unrealistically soon?

Cnkp21

Hi All

My 2 year fixed rate deal of 0.97% ends in 3 weeks and I locked into a 5.33% deal with my current lender HSBC in July. I’ve been hoping it would drop more than 5.33% and yesterday HSBC dropped it to 5.29%, which is nothing to get excited about. I can opt for HSBC’s tracker rate of 5.39% and I won’t be paying much more, however this is on the basis that the interest rate won’t rise again and will then start to fall in the future. If this happens then it may be the better deal for me.

My big concern is the war in the Middle East and if energy prices and petrol prices start rising then this may push up inflation and the BOE may start increasing the interest rate again. 

I have limited experience on the economy and I know it is impossible to predict, however is it unlikely that the interest rate will rise much further?

Many Thanks

Strummer22

Cnkp21 said:

Hi All

My 2 year fixed rate deal of 0.97% ends in 3 weeks and I locked into a 5.33% deal with my current lender HSBC in July. I’ve been hoping it would drop more than 5.33% and yesterday HSBC dropped it to 5.29%, which is nothing to get excited about. I can opt for HSBC’s tracker rate of 5.39% and I won’t be paying much more, however this is on the basis that the interest rate won’t rise again and will then start to fall in the future. If this happens then it may be the better deal for me.

My big concern is the war in the Middle East and if energy prices and petrol prices start rising then this may push up inflation and the BOE may start increasing the interest rate again. 

I have limited experience on the economy and I know it is impossible to predict, however is it unlikely that the interest rate will rise much further?

Many Thanks

In the current circumstances it’s unlikely that the interest rate will rise much further. Circumstances can change though. Really, the only advice is that if you prefer certainty get a fix, and if you really prefer certainty get a long fix. If you don’t mind uncertainty and could afford it if rates do go up several more percentage points, then a variable rate is definitely an option.

Strummer22

I'm going to take a punt and say inflation at the next update on Wed 20th will be below the 4% forecast. Around 3.8 or 3.9%. The first rate cut will be in May, by which time headline inflation will be about 1.5% and core inflation down to nearly 2%, maybe 2.5%. Base rate will be 4% or below by the end of next year. 

 

MattMattMattUK

Strummer22 said:

I'm going to take a punt and say inflation at the next update on Wed 20th will be below the 4% forecast. Around 3.8 or 3.9%. The first rate cut will be in May, by which time headline inflation will be about 1.5% and core inflation down to nearly 2%, maybe 2.5%. Base rate will be 4% or below by the end of next year. 

Whilst I would very much like that to be correct, I doubt we will have seen more than one 0.25% cut at most, down to 5%. I do not think the BoE will get serious about cutting rates until it is very obvious that they have overshot and we go into deflationary territory, which will late 2024 or early 2025.