Mortgage rates decrease in anticipation of the Bank of England’s interest rate announcement.

As market expectations point towards a quicker decline in central interest rates in the coming year, major lenders are proactively adjusting their mortgage offerings. HSBC, for instance, has unveiled plans to decrease mortgage rates for a variety of residential and buy-to-let properties. Additionally, Virgin Money has followed suit by announcing reductions of up to 0.36 percentage points, which will be implemented starting from Thursday.

These initiatives reflect the lenders’ responsiveness to the evolving market conditions and their commitment to providing competitive mortgage options to borrowers. The Bank of England is anticipated to maintain interest rates at 5.25pc during its upcoming meeting. However, money markets are forecasting a significant reduction in interest rates to 4.25pc by the end of the following year, marking a whole percentage point decrease.

This adjustment is an increase from previous expectations that rates would only fall by 0.75 percentage points in 2024. Traders also predict that the Bank of England will initiate the reduction of borrowing costs from their 15-year highs no later than May, contrary to the previous forecast of June. Recent data from the Office for National Statistics indicates signs of an economic slowdown, which may prompt policymakers to take measures to stimulate growth.