Interest rate outlook

• The Bank of England held the Bank Rate at 5.25% in its February 2024 meeting. The Bank Rate has been at this level since August 2023. Given current economic data, it is more likely that interest rates will be cut in the second half of 2024 not the first.

• The latest consensus forecast (January 2024) is for the Bank Rate to be 4.5% by the year end. Looking back over recent months, the interest rate expectations in the monthly consensus forecasts have been improving. The forecast issued in September 2023 was for 5% by the end of 2024.

• There is likely to be volatility in the economic data over the next few months. Despite higher interest rates, 85% of mortgages over 2023 were on fixed rates, helping borrowers manage the uncertain climate. Source: #Dataloft, HM Treasury (consensus average across contributing economists), FCA. *Q1 to Q3 2023