As of January 29, 2025, the Bank of Englands base interest rate stands at 4.75%. The Monetary Policy Committee is scheduled to announce its next decision on February 6, 2025. Market analysts widely anticipate a 0.25 percentage point reduction, which would bring the rate down to 4.5%.

This expectation is influenced by recent economic indicators. However, businesses reported increased price pressures, with costs and selling prices reaching their highest levels since mid-2023. Additionally, employment contracted, with job losses at the steepest rate since 2009, excluding the pandemic period. 

Given these mixed signals,stagnant growth coupled with rising inflation, the Bank of England faces a complex decision. While a rate cut is anticipated in February, the trajectory of interest rates throughout 2025 remains uncertain. Some forecasts suggest multiple cuts, potentially bringing the base rate to as low as3.5% by years end.

Its important to note that these projections are subject to change based on evolving economic conditions. The Bank of England are likely to continue to assess factors such as inflation, employment, and overall economic activity in its policy decisions. We will know shortly if a rate cut is made !