Rates Are Cut

The Bank of England's decision this week to cut the base interest rate has been met with widespread relief, especially given the prolonged period of high borrowing costs. However, this week has also highlighted the ongoing economic challenges within the UK. The threat of stagflation looms large, with inflation stubbornly remaining above the 2% target amid escalating price pressures and business confidence is waning.

The Bank has now lowered its growth forecasts for this year, signalling the potential for further rate cuts ahead. Financial markets are anticipating at least two, possibly three, additional reductions in the interest rate this year, with expectations for the base rate to fall below 4% by the end of 2025. The pace of these cuts will hinge on the economy's reaction over the coming months.

Adding to the complexity is the potential threat from Trump’s tariffs, which could disrupt global trade dynamics. Any detriment to global trade could hinder economic growth and policymakers are likely to tread cautiously, possibly deferring further cuts until May or June after reassessing in March.

Key Articles I Have Read This Week:

• Stamp Duty increases in England & Wales in April. This could mean needing to find £1000’s more if your house sale completes after the change: Read it here

• American companies were in a last minute dash to get their supplies in before the tariffs took hold. This caused the biggest US trade defecit since March 2022. Read it here

Investment Markets This Week:

Best Cash Savings Rates This Week

🏠️ Buying A Home Is About To Cost More 💷 

Stamp Duty Land Tax is changing on the 1st April. Thresholds are decreasing meaning that most house buyers will need to pay more if they complete after the 1st April. It’s a tight timeline but worth the push if you have the chance to complete ahead of the deadline.