The Bank of England has announced its latest decision — cutting the base rate from 4.25% to 4%. While widely expected by economists, the result was far from straightforward, with the Monetary Policy Committee split in a rare 5–4 vote.
In this episode of Citrus Bites, Richard Harris takes a closer look at the decision, the economic signals behind it, and what it means for homeowners, borrowers, and the wider UK economy.
Why Was the Rate Cut So Close?
Economic data has been sending mixed signals. On one hand, unemployment has been creeping up, wage growth is cooling, and the number of job vacancies is falling. On the other, inflation remains stubbornly high — well above the Bank’s 2% target.
The inflation challenge is being driven in part by sustained rises in food prices — with tea and meat seeing significant increases in recent months.
Impact on Borrowers
While a rate cut might sound like good news for homeowners, the impact will be mixed:
- Fixed-rate mortgages: Little immediate change unless your deal is ending soon.
- Tracker mortgages: Expect a quicker benefit as rates adjust.
- Those refinancing: Better news for anyone coming off higher fixed rates agreed in 2023, as current deals should be cheaper.
The Government’s £40bn Budget Dilemma
Richard also touches on the challenge facing the Chancellor ahead of October’s budget. With a significant deficit and limited options for raising revenue without breaking election pledges.
Watch the full episode now
This is a must-watch for anyone trying to make sense of the economic headlines. A clear, digestible breakdown of what’s happening in the UK economy — and what could happen next.
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