![\"interest](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/08\/bankd-of-england-interest-rate.jpg\")
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The base interest rate used to calculate mortgage premiums has been cut by 0.25% following a meeting of the Bank of England\u2019s Monetary Policy Committee (pictured, below).<\/p>\n
It has decided to take the \u2018breaks off the economy\u2019 following a month that has seen the UK battered by internal and external financial and economic events.<\/p>\n
![\"\"](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/08\/mpc-boe-committee.jpg\")
Members of the committee voted five against four in favour of the cut, saying that reducing its Bank Rate to 4% would help an economy that has seen growth \u201csubdued, consistent with a continued, gradual loosening of the labour market\u201d.<\/p>\n
\u201cA margin of slack is judged to have emerged in the economy. Downside domestic and geopolitical risks around economic activity remain, although trade policy uncertainty has diminished somewhat.<\/p>\n
\u201cA gradual and careful approach to the further withdrawal of monetary policy restraint remains appropriate.<\/p>\n
\u201cThe restrictiveness of monetary policy has fallen as Bank Rate has been reduced.<\/p>\n
\u201cThe timing and pace of future reductions in the restrictiveness of policy will depend on the extent to which underlying disinflationary pressures continue to ease. Monetary policy is not on a pre-set path, and the Committee will remain responsive to the accumulation of evidence.\u201d<\/p>\n
Its next decision will be on the 18th of September.<\/p>\n
Industry reaction<\/p>\n
The industry leader<\/p>\n
Nathan Emerson, CEO of Propertymark\u00a0 \u00a0<\/strong><\/p>\n \u201cThroughout the world, many central banks have faced considerable pressure to reduce interest rates, and the UK has been no exception. <\/p>\n \u201cSo, this news is extremely positive and remains consistent with what has been widely hoped for.\u00a0 \u00a0<\/p>\n \u201cWhile this news will be very welcome for many buyers and sellers who may be empowered to potentially borrow more to finance their next house move, inflation is still above the Bank of England\u2019s target rate of 2%.\u201d\u00a0<\/p>\n The portal<\/p>\n Matt Smith, Rightmove\u2019s mortgage expert<\/strong><\/p>\n \u201cAs expected we now have the third Bank Rate cut of the year, with the Bank continuing along its forecast trajectory.<\/p>\n \u201cMortgage lenders have had a bit of room to reduce rates over the last week, owing to the ongoing developments around global tariffs. However, we expect that lenders will use the headline of today\u2019s cut as the catalyst to reduce their rates a little further, though lender competition remains fierce and we don\u2019t expect major rate drops.<\/p>\n \u201cLenders have been competing for business in a market which has the largest supply of homes for sale in a decade. A combination of rate cuts and changes to buyer affordability criteria are helping many home-movers to responsibly borrow more towards the home that they want.<\/p>\n \u201cThe market expects there will be one more Bank Rate cut before the end of the year, with an outside chance of two. Any further cuts would likely see this cycle repeat again \u2013 with lenders using it as an opportunity to reduce rates a little more. It bodes well for the second half of this year, with further mortgage rate reductions and stable prices likely to encourage more activity.\u201d<\/p>\n The estate agent<\/p>\n Nick Leeming, Chairman of Jackson-Stops<\/strong><\/p>\n \u201cThe Bank of England\u2019s \u2018gradual and careful\u2019 approach remains firmly in place, even against a shifting economic backdrop. While widely expected,\u00a0today\u2019s cut underscores the need to strengthen confidence amid signs of a softening labour market.<\/p>\n \u201cFor mortgaged homeowners wanting to make their next move this decision offers timely relief, and lower borrowing costs should help to unlock activity across the market.<\/p>\n \u201cRegional disparities continue to shape market performance. Across the Jackson-Stops network in the mid-high end of the market, towns like Bury St Edmunds, Chichester and Colchester are seeing renewed buyer interest and modest price growth. Meanwhile, high completion levels in Colchester, Hale, Northampton, and Sevenoaks reflect sustained demand in lifestyle-led, commuter-friendly locations.<\/p>\n \u201cThese pockets of resilience highlight the realities of a market, driven by needs rather than nice to haves. As affordability improves and sentiment stabilises, we expect these regional strengths to continue driving market performance through the second half of the year.\u201d<\/p>\n The lender<\/p>\n![\"emerson\"](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/07\/nathan-emerson.jpg\")
Nathan Emerson<\/p>\n![\"Matt](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/08\/Matt-Smith-1.jpg\")
Matt Smith<\/p>\n![\"Link](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/08\/nick-leeming-jackson-stops.jpg\")
Nick Leeming, Jackson-Stops<\/p>\n
![\"paul](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/08\/noble-1.jpg\")
Paul Noble<\/p>\n![\"\"](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/08\/paresh-raja-125.gif\")
Paresh Raja<\/p>\n