Bank of England expected to cut interest rates

In a step viewed by homes and economists, interest rates are expected by Bank of England.

Analysts estimate that the benchmark rate will be cut from 4.75% to 4.5%, as the bank comes under pressure to promote the UK economy. Which is showing slow growth.

The bank is aimed at controlling inflation, and a cut after inflation rate is expected – which charts the rising cost of life – fell to 2.5% in December to December.

However, it remains above the target of 2%of the bank’s 2%, and the change in budget is predicted to push it up.

Economic uncertainty has increased due to the introduction, or danger, import tariff of US President Donald Trump. They can lead to inflation pressure globally, causing a knock-on effect when the price increases in the UK.

The bank moves rates up and down to try to control inflation, which measures the speed of increase in overall value.

By increasing the rates, borrowing becomes more expensive, so people have less money to spend. People can also be encouraged to save more.

In turn, it reduces the demand for goods and slows down the rate on which prices are increasing.

But this is a balanced task – the cost of growing borrowing is the risk to damage the economy as it discourages businesses from investing and creating more jobs.

Once the price is increased, the bank will consider reducing interest rates.

Its base interest rate greatly affects the rates of high street banks and other money lenders that charge customers for loans, credit cards and other finance deals.

It is most clearly seen in the cost of the mortgage. Reducing the base rate will show immediate effect for those on “tracker” mortgage.

About 629,000 hostage holders have trackers deals. Typically, their monthly repayment will result in a fall of about £ 29 as a result of the latter 0.25 percent point cut.

The same number of homeowners have convertible rate deals, and if the bank reduces the base rate, the lenders will be under pressure to cut their rates.

The fixed rate deal does not change immediately, but may be new, or renewed in the hope of further cuts, borrowers may get a better deal.

The saver will be hit by a fall in base rate, as the returns they receive from banks will also be likely to cut.

In December, when the rates were held at 4.75%, the bank’s governor Andrew Bailey said it would “take a gradual approach to the future interest rate”.

But he said: “We cannot be committed to cut rates in the coming year when or how long.”

In a few minutes of that meeting, the bank stated that “there was uncertainty around measures announced in the autumn budget”.

After the November meeting, Mr. Bailey will not be drawn on the impact of Trump Tariff on the UK economy, “Let’s wait and see”.

In the US, the Central Bank – Federal Reserve – has indicated that it will cut slow rates this year.

When the bank announced the decision of its interest rates at 12:00 pm, it will also share a report where it looks at inflation in the coming months and can indicate her strategy in response.

By cutting the UK interest rate, “will create a balance between” supporting an economy, which is ground for a complete stop and prevents inflation from removing “, Capital Economics Economics Economics Paul Delles told the BBC to BBC .

He said, “Trump’s tariff is unlikely to affect the UK interest rates a lot,” he said, but the wages may increase rapid wages than the bank’s forecast.

Britain’s economy Decreased expected in NovemberAfter not growing in the last two months. Another recession is expected as a lack of businesses for rising costs from April due to increasing national insurance contribution and high minimum wages such as high minimum wages.

Economic figures came after recent unrest in financial markets, sent the government’s borrowed cost to the highest level and pound price for many years.