Miri Thomas talks to Insider's UK Property Editor Chantelle Dietz about today's decision by the Bank of England to cut interest rates to 5%.
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00:00Hi, I'm Mary Thomas. And I'm Chantelle Dietz.
00:08So today, Chantelle, the Bank of England has announced that the interest rates are getting
00:12cut from 5.25% to 5%. What's been the reaction?
00:17Well, it's been really positive, Mary. Obviously, we've got to bear in mind that the rates have
00:21been held quite high for a period of time. So, since August 2023, they've been held at
00:275.25%. So, it is a good confidence boost for the market.
00:33It's only a small decrease, though. I mean, is it going to make much of a difference?
00:37I think it will. Already, lenders have factored in this cut. So, we might not see a flurry
00:43of market activity with lenders cutting rates. NatWest and Virgin Money are two that have
00:50already cut rates in anticipation of this today. So, you know, it is a small amount,
00:56but it will be fairly significant and it's a step in the right direction.
01:00So, what we're talking about here is obviously mortgage rates and things like that for the
01:04average consumer. But bigger investors have also been telling me that because the cost
01:08of servicing debt has been so high, that some of them have been sitting on their hands rather
01:13than making commitments to those big deals, waiting for rate cuts. I mean, is it going
01:18to make a difference to them? I think it will make a difference to them
01:21as well. They've also been restricted by construction and material costs, which means that they've
01:26had to readjust their expectations on what profits they will make out of developments.
01:31So, yeah, I know it sounds small, but I think it will make a difference and hopefully we're
01:35on the right trajectory for things to improve further.
01:38So, what else can we expect after today's cut? Well, the Bank of England will meet again
01:43on the 19th of September. So, we may have another cut within a month's time, which would
01:48be great news. And also, on top of the planning reform, I think this is really positive and
01:54a huge confidence boost for the market.