Martin Lewis (Image: Getty)
Martin Lewis has swiftly clarified what the Bank of England’s decision to cut means for individuals with savings, mortgages, loans and more. The Bank decided on Thursday to reduce from 4.75% to 4.5%, simultaneously lowering short-term growth forecasts for the economy.
Governor Andrew Bailey stated that many would welcome the cut, but the Bank is “monitoring the UK economy and global developments very closely, and taking a gradual and careful approach to reducing rates further”. The Bank has halved its growth forecast for the UK economy to 0.75% for this year, down from previous estimates of 1.5%, before it picks up again in 2026 and 2027.
Martin Lewis explained on X that for mortgages, “if fixed, no change until your fix ends. If on tracker rate will drop 0.25% points, if variable it should drop by around that by doesn’t have to be exact amount. Usually takes up to a month to come in.”
Explaining that those with a tracker rate will see their payments decrease, he added: “The reduction is equivalent to £15 lower repayments per month per £100,000 of .”
He also noted that “variable rate savings (which is mainly easy access accounts) will likely drop within a two to four weeks by 0.25%”. However, he mentioned there is “a lot of competition out there in the cash ISA market at the moment so I think the very top rates could stay at or above 5%”, and encouraged people to check out the “best buys” on the Money Saving Expert website.
Mr Lewis stated: “Fix rate savings have already factored in some of this cut. Though they may shave down further. If you want to fix your savings safest bet is do it today.”
He concluded his statement by noting that existing loans will remain unaffected as “they’re usually fixed rates”, and predicted that people can “expect the cheapest new loan rates to shave down very marginally.”