Now that the expected cut has been made, what does the industry make of it?

Butterfield Mortgages chief executive Alpa Bhakta said the rate cut would be welcomed by the Prime Central London (PCL) market.

“2025 has been a challenging year so far and lower rates will help to boost borrower confidence. That said, many investors remain cautious and are seeking greater stability before committing to their investment plans. Lenders need to continue providing the tailored support and transparency required to navigate the market and maintain momentum.”

Market Financial Solutions chief executive Paresh Raja pointed out that inflation might remain above the 2% target, but a softening labour market and sluggish economic growth meant the Bank of England was justified in taking this action.

“More of the ‘wait-and-see’ approach looked like doing more harm than good, and this is likely to provide the UK property market with a real boost.”

He added: “Borrowers might not see an immediate changes. After all, the markets had been expecting this cut for some time, and many lenders have already reduced their rates in preparation.

“But every cut will be welcomed and will undoubtedly help to unleash pent-up demand, driving increased activity in the coming weeks, particularly during the typically busy period as the summer holidays draw to a close.”

Chetwood Bank chief executive Paul Noble agreed that the rate cut would be welcomed, but insisted it was slow progress for an economy in desperate need of a kickstart.

“Domestically and globally, the economy has taken a beating over the last year, but a trade deal secured with the US is one factor that has started to ignite some flickers of hope and likely prompted the MPC to continue to ease off on the brakes.

“However, inflation remains above target, and many will argue that the MPC should have not only acted sooner but acted more decisively too. After all, leadership isn’t just about reacting when conditions are safe – it’s about shaping the path forward.

Bolder action needed

Noble said caution had been the watchword on Threadneedle Street for a long time now, with rates slow to go up when inflation began to skyrocket and then slow to come down when inflation more settled.

“What was really needed today was bolder action to catalyse the economy and really create growth, rather than more tentative tiptoeing.

“Nevertheless, today’s decision should be seen as a green light by investors. Rates are now far below their peak, and the lending markets should respond in turn. Pent-up demand can now be released, and we should expect activity levels to rise in the aftermath of today’s news.”

As for further cuts in the coming months. W1M portfolio manager James Carter thinks the MPC is unlikely to pre-commit to further easing after this cut.

“Assuming further labour market softening, we would still expect cuts in November and February. However, today’s move likely marks the start of a more data-dependent phase, with policymakers watching global events closely and balancing the risk of persistent inflation against a cooling jobs market. Clearer data on the impact of tariffs or another bout of global instability could easily tip the Bank’s next decision one way or another.”

Buy to let 

Fleet Mortgages chief commercial officer Steve Cox said the decision to cut Bank Base Rate to 4% was both welcome and necessary, given the current economic backdrop.

“Many analysts had warned of the risks of holding rates too high for too long, and this cut helps to ensure monetary policy does not compound those pressures while also delivering a clear boost for borrowers and the housing market.

“For the buy-to-let sector, this decision will filter through to swap rates, creating an even more competitive pricing environment for advisers and their landlord clients.