The Bank’s Governor, Andrew Bailey, blamed the “unpredictable” global economic situation and the US-China trade war.
square MORTGAGES How relaxed mortgage rules could make things harder for first-time buyers
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Some forecasters now think there could be just one more rate cut in 2025, though others expect more than this.
“We’ve added the word ‘unpredictable’ to ‘uncertain’ because of the sheer nature of what we’re dealing with.”
Aaron Strutt, product and communications director at Trinity Financial, said: “Nobody knows exactly what will happen with mortgages rates. Often rates are predicted to come down and they go up or vice versa.
Earlier in spring, mortgage rates had been falling after Donald Trump’s tariff policies led experts to predict interest rates would fall rapidly, to limit damage to the economy.
There have also been multiple twists and turns on the US President’s tariffs, with some being delayed or withdrawn, and a court block, which was then appealed.
Even small fluctuations in rates can make mortgage costs more expensive.
In other comments made before the committee, Bailey told MPs that the tariff war was “negative for world growth and activity”.
The relationship between the US and China is at “the centre” of global trade tensions and is a “genuine concern”, Bailey said.
His comments came after UK economic forecasts were downgraded for the next two years by the Organisation of Economic Co-operation and Development (OECD).
In the UK, the economy is expected to grow by 1.3 per cent this year, with the OECD cutting its previous forecast of 1.4 per cent.
The OECD also highlighted that substantial debt payments will continue to weigh on the UK’s state finances and “push up public debt”.
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