The Monetary Policy Committee (MPC) has voted to reduce the Bank of England base rate from 4.00% to 3.75% at its December meeting — a move widely anticipated by markets.
Following last month’s hold, today’s decision was passed by a narrow majority of five votes to four. The remaining members voted to keep rates unchanged at 4.00%. A sharper-than-expected fall in inflation, with CPI dropping to 3.2% in the year to November, is likely to have been a decisive factor.
Lenders had already begun adjusting their pricing in anticipation of the cut. Fixed rates across two- and five-year terms are now widely available from just above 3.5%, with further reductions expected if swap rates continue to ease.
Commenting on the Bank’s decision, David Wise, Founder of Fitch & Fitch, said:
“This reduction was expected — the inflation data earlier in the week effectively confirmed it.”
“Markets are now pricing in two or three further cuts in the first half of 2026. That’s good news for buyers, but particularly helpful for those coming to the end of a fixed deal.”
“Remortgaging clients now have a rare opportunity. Most lenders allow you to secure a new rate months in advance, but still change product before drawdown if better terms become available. If rates drop again, you may be able to switch. If not, you’ve secured peace of mind either way.”
Planning remains key
With mortgage pricing likely to fluctuate into the new year, early advice and forward planning remain important. Working with a whole-of-market broker like Fitch & Fitch can help ensure you secure the most suitable product, with flexibility if rates continue to improve.
For clients purchasing or refinancing in the coming months, now may be a prudent time to explore options and protect your position – contact our highly experienced team today 0207 859 4098