Interest rates: what to expect in 2025

The average two-year fixed mortgage rate has decreased from 5.93% in January 2024 to 5.48% at the start of 2025, but many are still feeling the pinch. With 1.8m fixed mortgage deals expiring in 2025, homeowners are hoping for more aggressive rate cuts from the Bank of England. However, inflation remains a concern, currently at 2.6%, above the Bank's target of 2%. Bank of England governor Andrew Bailey anticipates four rate cuts in 2025, potentially lowering the Bank Rate to 3.75% by year-end. While some relief may be on the horizon, experts say borrowers should prepare for a slow recovery in mortgage affordability. 

The Daily Telegraph (06/01/2025)