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The cost of borrowing is expected to fall to its lowest point in more than 18 months. Senior economists at the Bank of England will announce later on Thursday whether they are cutting the º£½ÇÊÓƵ’s base interest rate, which currently sits at 4.75%.

Most experts predict a quarter point reduction to 4.5%, continuing a series of cuts which started last summer.

The base rate helps dictate how expensive it is to take out a mortgage or a loan, while it also influences the interest rates offered by banks on savings accounts.

Hikes in recent years, designed to combat skyrocketing inflation, have left mortgage rates much higher than was normal for most of the last decade.

The base rate rose as high as 5.25% in late 2023, but the Bank’s policymakers cut it to 4.75% over the course of several months last year. The last time the rate was set at 4.5% was in May 2023.

The Bank typically raises interest rates when inflation is high to discourage people from spending money, thereby slowing the rate of price rises.

Now, inflation – which measures how fast prices are rising across the economy – is much lower than the highs of recent years, at 2.5% per year.

Meanwhile, economic growth is stagnating across the º£½ÇÊÓƵ, leading to predictions of another rate cut, which would encourage more spending and stimulate the economy.