Bank of England unlikely to cut interest rates and help squeezed Brits before autumn

HOPES are fading that the Bank of England will soon lower rates and take the pressure off squeezed Brits.

Megan Greene, one of the Bank’s rate-setters, yesterday said that interest rate cuts “should still be a way off”.

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Markets have now pushed back their bets, predicting the Bank will only start lowering rates from the current 5.25 per cent in August or September.

It is a big change from the start of the year when economists reckoned falling inflation would mean the Bank would start cutting in May or June with the rate falling to 4 per cent by Christmas..

The Bank rate has a big influence on the mortgage rates and interest costs paid by Brits.

As a result of the shift in expectations, mortgage rates have started to creep back up with the average two-year fix rate rising back to 5.8 per cent, according to Moneyfacts.

The dampened hopes for lower rates come despite the European Central Bank signalling it will start cutting interest rates soon if inflation continues to fall.

Yesterday the ECB kept its rate at 4.5 per cent despite inflation falling to 2.4 per cent, near its 2 per cent target.

This post first appeared on thesun.co.uk