When will the Bank Rate go down in 2024?

Some leading experts have suggested that the Bank of England (BoE) could be forced to bring forward its first planned interest rate cut sooner rather than later in 2024 if inflation drops to 2% by April.

Chief economist at Oxford Economics, Andrew Goodwin has expectations that the Consumer Price Index (CPI) will average 2.1% in 2024 – much lower than the November forecast of 3.1%, adding “Inflation is on track to return to the 2% target in April”, which is 18 months earlier than the Bank of England current forecast.

Good news for mortgages

In early January, Andrew Bailey, BoE Governor said this could be good news for mortgages, “Obviously we have had a big change in market interest rates in the last few months, and so the cost of mortgages is coming down… that is feeding through into mortgage costs, and I hope that is something that continues”.

A word of caution

However, it’s worth noting that the Monetary Policy Committee (MPC) voted by six votes to three to at its last meeting in December to maintain Bank Rate at 5.25%. The remaining three votes were in favour of raising Bank Rate to 5.5%. This is the second time in a row for such a split vote – and indicates rates may not start to fall soon.

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