Majority of intermediaries expect at least two cuts by February 2026
More than half of mortgage brokers believe there will be at least two further interest rate reductions before the end of February 2026, according to a recent survey conducted by specialist buy-to-let lender Landbay.
The poll, carried out earlier this month and involved 58 brokers, asked participants how many rate cuts they expected by the end of February next year. Of those surveyed, 52% anticipated at least two reductions in the Bank of England’s base rate within that timeframe.
Around nine in 10 brokers (91%) expected at least one more rate cut, a further 12% predicted three cuts, while only 9% of respondents said they did not foresee any additional cuts from the Monetary Policy Committee (MPC) during the period.
Landbay’s survey results come as the Bank of England reduced its base rate by 0.25% to 4% earlier this month. This marked the fifth reduction since August 2024, when rates peaked at 5.25%, their highest level in 16 years. The most recent decision was narrowly passed, with five MPC members supporting the cut and four voting to maintain the rate.
“Our research shows mortgage brokers are overwhelmingly optimistic about further interest rate cuts, with 91% expecting at least one more this year,” said Rob Stanton (pictured right), sales and distribution director at Landbay. “This confidence reflects a strong belief in continued monetary easing, which could boost borrowing and market activity.
“Over half of the intermediaries we polled told us they anticipate at least two cuts by year-end suggesting robust expectations for the back end of 2025. While brokers clearly see sustained economic support from the Bank of England, I wonder if two cuts before the end of the year might look like wishful thinking following the July inflation figures.”
Research from Pantheon Macroeconomics offered a more cautious perspective. The firm’s chief UK economist, Rob Wood, suggested that the August reduction could be a “one-and-done” move, with only one further cut likely in 2025, possibly in November.
The Bank of England may indeed consider pausing further interest rate reductions in the near term due to persistent inflationary pressures. Official figures released on Wednesday showed UK inflation up again in July, reaching its highest level in 18 months. This increase, driven by rising costs in several key sectors, has kept inflation well above the central bank’s 2% target.
Such developments suggest that the central bank could adopt a more cautious approach, weighing the risks of fuelling further price increases against the need to support economic growth. As a result, policymakers may opt to hold rates steady until there is clearer evidence that inflation is on a sustained downward trajectory.
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