Speculation is continuing to grow that the Bank of England will reduce interest rates on Thursday. Last week Nationwide reintroduced sub 4% fixed rate mortgages as it cut rates by up to 0.25% across its two, three and five-year fixed rate products. Barclays and TSB are the latest lenders to drop their fixed rate mortgages offering consumers hope that a summer price war is on the cards.
Recently, a report from the Institute of Fiscal Studies claimed that as many as 320,000 adults in the UK have, as a direct result of rising mortgage costs, been pushed into poverty.
Following 14 hikes in the base rate over the last two years a change in direction would start to offer some relief to first time buyers and those due to re-mortgage in the near future.
A Reuters poll of economists found the majority expected the monetary policy committee to vote in favour of a drop in the base rate from its current 15-year high of 5.25%.
Some 49 out of 60 – over 80% – of respondents to the survey, held over 18-24 July, believed a cut would be made.