Economic Forecast: Bank of England Projects Modest Growth Post Rate Cut
The Bank of England's latest monetary report predicts modest GDP growth of 1% for the remainder of 2025. This projection incorporates factors such as subdued consumer spending, ongoing global trade uncertainties, and the impacts of previous interest rate movements. Policymakers emphasize that economic growth will remain sensitive to international developments and domestic consumption trends.
Conservative Growth Projections
Although this forecast is relatively conservative, it represents a shift in tone compared to earlier, more cautious projections. The recent interest rate cut is a tool to stimulate borrowing and investment, which could support businesses and homeowners alike. Industry leaders remain divided, with some praising the decision and others urging more aggressive fiscal measures.
Key Economic Indicators to Watch
Financial observers will be closely monitoring inflation rates, wage growth, and consumer confidence in the coming months to determine whether this forecast holds true. It serves as a reminder that, while rate cuts offer opportunities, their long-term effectiveness depends on a balanced approach to economic policy.
Forecast Highlights
- GDP Growth: 1% projected for remainder of 2025
- Inflation Target: Maintaining 2% medium-term goal
- Employment: Stable but modest job creation expected
- Consumer Spending: Gradual recovery anticipated
- Business Investment: Rate cuts expected to encourage expansion
Implications for Mortgage Market
- Continued low interest rate environment likely
- Mortgage demand may increase gradually
- House price growth expected to moderate
- Regional variations in market performance
- First-time buyer activity may improve
Related: Read more on Bank of England