Posted: 2nd October 2024
2024 Economists predict: Interest rate cut, and price raised by 5%
Interest rates are anticipated to be reduced at least twice this year, with house prices projected to increase by 5%, according to prominent economists.
A survey of 41 economic experts conducted by The Times revealed that the majority expect two cuts in the Bank of England's base rate, while nearly half predict three or more reductions.
Currently, the base rate is set at 5.25%, following three consecutive holds by the Bank’s monetary policy committee last year. However, Bank Governor Andrew Bailey has cautioned that it is premature to consider any reductions.
Only two economists from the survey believe the Bank will maintain the base rate at its current level.
Inflation has decreased to 3.9% and is projected to decline further toward the Government’s target of 2% in the coming months.
Economists anticipate a 0.4% reduction in average two and five-year fixed mortgage rates, which is expected to significantly influence the market.
In the meantime, some economists are predicting a rise in house prices this year as mortgage rates continue to decrease.
Consultancy Pantheon Macroeconomics estimates a 5% increase in house prices for 2024, as reported by The Times.
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