UK borrowing rates to fall to 2.75% by end of 2024- Goldman Sachs

Posted on October 22, 2024   |  

Goldman forecasts UK interest rates to fall from 5% to 2.75% by the end of next year, offering relief to mortgage holders.

The Bank of England is expected to cut rates more quickly than anticipated, dropping below the predicted 3.5% as inflation decreases faster than expected.

UK inflation has fallen to 1.7%, below the Bank of England's 2% target, easing pressure on living costs and encouraging quicker rate reductions.

Interest rates were raised to 5.25% last year, the highest since the 2007-08 financial crisis, but were lowered to 5% in August 2024.

Mortgage rates rose sharply, with the average two-year fixed-rate mortgage increasing from 3.66% to 5.24% during this period.

While lower rates will ease mortgage costs, savers may experience lower returns as borrowing costs decrease.