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| Version 0 | Version 1 |
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| Bank of England expected to cut interest rates | Bank of England expected to cut interest rates |
| (about 8 hours later) | |
| UK interest rates are widely expected to be cut on Thursday, taking the cost of borrowing to its lowest level for more than two years. | UK interest rates are widely expected to be cut on Thursday, taking the cost of borrowing to its lowest level for more than two years. |
| Financial markets predict that the Bank of England will reduce interest rates to 4% from 4.25% in its fifth cut since last August, taking it to the lowest since March 2023. | Financial markets predict that the Bank of England will reduce interest rates to 4% from 4.25% in its fifth cut since last August, taking it to the lowest since March 2023. |
| A lower base rate can reduce monthly mortgage costs for some homeowners but it also means a smaller return for savers. | A lower base rate can reduce monthly mortgage costs for some homeowners but it also means a smaller return for savers. |
| The Bank of England will also publish its forecasts for an economy that failed to grow in April and May - potentially creating a yawning spending gap which the government could choose to fill by announcing tax rises in the Autumn Budget. | The Bank of England will also publish its forecasts for an economy that failed to grow in April and May - potentially creating a yawning spending gap which the government could choose to fill by announcing tax rises in the Autumn Budget. |
| Next week, the Office for National Statistics will release data on how the UK economy performed between April and June. | Next week, the Office for National Statistics will release data on how the UK economy performed between April and June. |
| It grew by 0.7% in the first three months of the year. | It grew by 0.7% in the first three months of the year. |
| If the Bank does trim rates, repayments on an average standard variable rate mortgage of £250,000 over 25 years will fall by £40 per month, according to financial information company Moneyfacts. | |
| But for savers, the average return rate would fall from 3.9% in August last year to 3.5%, the financial data firm said. | But for savers, the average return rate would fall from 3.9% in August last year to 3.5%, the financial data firm said. |
| "Savings rates are getting worse and any base rate reductions will spell further misery for savers," said Rachel Springall, finance expert at Moneyfacts. | "Savings rates are getting worse and any base rate reductions will spell further misery for savers," said Rachel Springall, finance expert at Moneyfacts. |
| UK interest rates are expected to continue falling, though not at the same pace as the market has seen since last year. | |
| "We are expecting more cuts," said Liz Martins, senior UK economist at HSBC. | |
| She told the BBC's Today programme she forecasts that borrowing costs will fall to 3% by the latter part of 2026. "But from today I do think the Bank of England will be a bit cautious," Ms Martins added. | |
| Inflation | Inflation |
| Interest rates are expected to be cut despite inflation - which measures the pace of price rises - climbing above the Bank of England's 2% target. | Interest rates are expected to be cut despite inflation - which measures the pace of price rises - climbing above the Bank of England's 2% target. |
| In the year to June, inflation rose to 3.6% due in part to the higher cost of food and clothing as well as air and rail travel. | In the year to June, inflation rose to 3.6% due in part to the higher cost of food and clothing as well as air and rail travel. |
| However, there are signs that the UK employment market is cooling which could weigh on inflation. | However, there are signs that the UK employment market is cooling which could weigh on inflation. |
| Recent figures show that the number of people on payrolls is falling, vacancies are lower and the jobless rate has ticked higher. | Recent figures show that the number of people on payrolls is falling, vacancies are lower and the jobless rate has ticked higher. |
| Meanwhile, annual growth in average regular earnings, excluding bonuses, slowed to 5% between March and May. | Meanwhile, annual growth in average regular earnings, excluding bonuses, slowed to 5% between March and May. |
| Employers are facing higher costs, including an increase in National Insurance Contributions and the national minimum wage. | Employers are facing higher costs, including an increase in National Insurance Contributions and the national minimum wage. |
| We will bring you live reporting from the Bank when we get the decision at 1200 along with expert analysis on what it means for you and your money. | We will bring you live reporting from the Bank when we get the decision at 1200 along with expert analysis on what it means for you and your money. |
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