Bank of England Cuts Interest Rate to 4.25%

The Bank of England has announced a reduction in its base interest rate from 4.5% to 4.25%, marking its second rate cut of 2025 and the fourth since August 2024.

The decision, made by the Monetary Policy Committee (MPC), comes in response to signs of easing inflation and slower economic growth. The rate cut is expected to lead to lower borrowing costs across the financial sector, including for mortgages.

Following the announcement, several major lenders began to adjust their mortgage offerings. Nationwide and Leeds Building Society were among the first to lower fixed-rate deals, and further reductions across the market are anticipated in the coming weeks.

Lower interest rates generally result in reduced monthly payments for borrowers on variable or tracker mortgages and may improve affordability for those looking to take out a new mortgage.

The Bank of England’s move is seen as a continued effort to support economic stability and bring inflation back to its 2% target over the medium term. Further decisions on interest rates will depend on upcoming data on inflation, wage growth, and overall economic performance.

This latest cut could provide an opportunity for homebuyers to benefit from more favourable lending conditions as the property market heads into summer.