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

fergie_

Spies said:

Quick question which I don't feel like it's worth making a thread for, my fixed deal ends end of this month, if I hold off fixing again and roll on to SVR, will I have to pay a penalty to take another fix if I just wait until Feb? 

Some lenders such as Natwest will let you transfer to a tracker at no fee and then transfer back off that when you choose. Not as cheap as a fix, but likely to be cheaper than SVR. However, need to check what your lender offers first and if any conditions. Some will charge a penalty to leave the tracker or have a minimum time before you can fix from it.

magpies79

Can I ask a question please so I’m with Halifax 
my mortgage has 4 years I think to run owe around 
27k I’m on SVR so with every interest rate rise my mortgage has gone up I believe around 12-13 times so if they start cutting rates will I see my payments being reduce each month with each interest rate cut?

I know that seems like a stupid question but I feel
mine always goes up with a rate rise but never seems to go down 

Hoenir

magpies79 said:

I know that seems like a stupid question but I feel
mine always goes up with a rate rise but never seems to go down 

SVR will only fall when the BOE cuts base rate. Why haven't you opted for a fixed rate product? 

magpies79

Because we was looking to move this year hopefully next year so didn’t want to fix a deal.
on Halifax website the best deal I seen was 2 year fixed for like £50 a month less then what im paying now and I couldn’t shop around as I have a ccj on file but that’s due to come off this week 

Strummer22

Hoenir said:

magpies79 said:

I know that seems like a stupid question but I feel
mine always goes up with a rate rise but never seems to go down 

SVR will only fall when the BOE cuts base rate.

Not strictly true as a lender can change their SVR any time they like, although after a BoE base rate change is a likely time.

A tracker rate linked to the base rate would change in step with it though.

@magpies79 may feel like there’s never been a drop because, apart from at the start of Covid when base rate dropped, there have only been increases in recent years.

Maka344

I’m going to bet that the next inflation update will be around 2.8%. 

Strummer22

Maka344 said:

I’m going to bet that the next inflation update will be around 2.8%. 

Have you got anything to base that on? The month on month figure from dec 2022 that’s coming out of the annual calculation is 0.4%. To go down by 1.1% in the next update, the new figure will need to be -0.7% month on month, i.e. the “basket” of goods used to calculate CPI would need to be 0.7% cheaper on average in Dec 23 compared to Nov 23. I would believe up to -0.3% but anything lower would surprise me.

Strummer22

https://www.theguardian.com/business/2024/jan/11/bank-of-england-may-cut-interest-rate-sooner-after-surprise-inflation-forecast

"The Bank of England may be forced to bring forward the date of its first interest rate cut after three leading forecasters issued a surprise update suggesting the inflation rate will halve to 2% by April."

I've been saying this for ages (e.g. https://forums.moneysavingexpert.com/discussion/comment/80301594#Comment_80301594 and https://forums.moneysavingexpert.com/discussion/comment/80405653#Comment_80405653).

Why is everyone else so surprised?

Andreg

Yes, base rate will stay at 5.25% at February.  Headline inflation falling is not enough for BoE to cut rates: they will first need to see significant reductions in core inflation over a sustained period of a few months, and weakening of the jobs market.  Particularly with new inflation pressures emerging, most recently from Yemen.

RelievedSheff

There definitely won't be any change in base rate in February.

I predict the first rate cut will be a 0.25% cut in May provided that inflation does fall as predicted and there are no more energy shocks or oil price shocks before then, which is far from a given.