Interest rate outlook
The Bank of England held the Bank Rate at 5.25% in its February 2024 meeting. The Bank Rate has been at this level since August 2023. Given current economic data, it is more likely that interest rates will be cut in the second half of 2024 not the first.
The latest consensus forecast (January 2024) is for the Bank Rate to be 4.5% by the year end. Looking back over recent months, the interest rate expectations in the monthly consensus forecasts have been improving. The forecast issued in September 2023 was for 5% by the end of 2024.
There is likely to be volatility in the economic data over the next few months. Despite higher interest rates, 85% of mortgages over 2023 were on fixed rates, helping borrowers manage the uncertain climate. Source: #Dataloft (https://inform.dataloft.co.uk/), HM Treasury (consensus average across contributing economists), FCA. *Q1 to Q3 2023.
What Jukes Estate Agents Harlow think
Interest rate outlook
This makes interesting reading, and Dataloft are a trusted source of data. However, this set of figures seems to ‘fly in the face’ of what Jukes Estate Agents Harlow were told. Back in October 2023, Jukes Estate Agents Harlow were invited to a meeting with the Bank of England.
Firstly, it has to be said that these forecasts are ALWAYS open to interpretation. Therefore, we have to try sometimes to read between the lines.
The Bank of England stated that the current rate of 5.25% would remain until around April / May 2024.
They said that they forecast two cuts during 2024. Both would be 0.25%. This would mean a base rate of 4.75% by the end of 2024.
This latest data suggests it might be 4.5%. Jukes thinks it will still be 4.75%. Who will be right?
The Bank of England stated that during 2025 the base rate will continue to fall to around 4% by the end of said year.
They then thought that the base rate would fall to 3.75% in early 2026 and that this is where they would prefer the base rate to stay at. This would help them get to their 2.0% inflation target.
Below is a Jukes Estate Agents Harlow prediction.
Firstly, May 2024 5.00%
Secondly, September 2024 4.75%
Thirdly, March 2025 4.50%
Then, July 2025 4.25%
Then, October 2025 4.00%
Finally, March 2026 3.75%
These predictions are just Jukes opinion. It will however, be interesting to see exactly what happens.
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