Attention is shifting from this week’s decision to what it signals for early-2026 activity
Mortgage brokers are broadly expecting the Bank of England to deliver a base rate cut at Thursday’s MPC meeting, but advisers say the announcement itself may matter less than how borrowers and lenders respond in the months that follow.
Craig Woulds of Vizion Mortgages said he expects a reduction, even if its immediate impact is limited for most borrowers. “I do expect a rate cut. I think we’ll get at least a quarter percent reduction.”
He said that while a base rate cut can feel significant, it does not usually translate into instant savings for borrowers on fixed rates. “For most borrowers, unless they’re on a tracker, a base rate cut doesn’t affect their monthly payments immediately. Fixed rates are impacted by swap rates between lenders, not directly by the Bank of England base rate.”
Where the decision may carry more weight, Woulds suggested, is in how it shapes sentiment and borrower behaviour. “The biggest impact is psychological and media-driven. It creates positive headlines going into 2026… That encourages people to think, ‘Our rates are easing, maybe we can afford to move.’ That, in turn, can drive more purchase and remortgage activity for brokers.”
Graham Taylor of Hudson Rose also expects a cut, pointing to recent economic trends rather than market pressure alone. “I think a cut is on the cards, especially given the uptick in unemployment and declining wage growth.”
However, Taylor warned that the timing of the decision may blunt any short-term response, particularly as households head into the Christmas period.
“The timing so close to Christmas means that there will probably be a delay before we see any potential upside. But it could provide a stronger start to 2026, so long as potential movers feel their job is secure and they have enough money in their pocket - which in the current climate is far from guaranteed.”
From a lender perspective, Anthony Emmerson of Trinity Financial said markets have already moved ahead of the MPC, with pricing reflecting expectations of a cut. “We believe there is going to be a cut on Thursday and that this is already baked into the rates that are currently on offer to applicants.”
He said cheaper finance could still support activity, particularly among younger buyers weighing renting against buying. “Cheaper rates will mean greater activity in the housing market as the difference between rental and mortgage costs widens in favour of home ownership for younger people with a reasonable deposit.”
Emmerson added that lenders are already looking ahead to future decisions rather than reacting to this week’s announcement alone. “We don’t think that rates will immediately move on the announcement as its already taken into account. The lenders will then shift their attention to the next announcement and the expected direction of rates at that meeting.”
For brokers, the focus now shifts from the decision itself to whether it is enough to change borrower behaviour as the market moves into the new year.
