What next for interest rates?
Susannah Streeter, head of money and markets, Hargreaves Lansdown:
“As financial markets are hit with waves of trepidation about what’s in store for global trade, the Bank of England is set to stay in wait-and-see mode. It’s highly unlikely, given the current climate of uncertainty, that policymakers will vote to cut rates this month.
The last inflation snapshot came in higher than expected, jumping to 3% in January, which is another reason why they won’t be in a hurry to reduce borrowing costs.
It’s unclear what the exact repercussions of Trump’s punishing tariffs will be for the UK, but given how intertwined the UK is with the global economy, it will also feel the effects as the trade war escalates. Already growth is highly sluggish, only just crawling along, by 0.1% in the final quarter of last year.
There are hopes of a trade deal between the US and the UK, but given Trump’s capricious policymaking, until any agreement is signed, sealed and delivered, the UK is set to stay vulnerable. So, given the precarious growth situation, two more rate cuts are on the cards for this year, but it’s likely that we will have to wait until May, at the earliest before another cut is delivered.’’
What will happen to savings?
Sarah Coles, head of personal finance, Hargreaves Lansdown:
“The savings market has showed impressive stamina in 2025 so far, with the best fixed savings deals hanging on above 4.5% and the best easy access above 4.75%. Competition in the cash ISA market also remains impressive, so you can still get 5% on easy access savings – if you’re prepared to live with a very short-term bonus.
However, it’s vital not to be lulled into a false sense of security by the fact rates haven’t moved far yet. We’re unlikely to get a cut next week, but we are still expecting a couple of cuts by the end of the year, and more to follow. It means the general direction of rates is likely to be downwards. If you have funds that you won’t need for a year or more, it’s well worth considering fixing them while these deals are still around.
Cuts aren’t nailed on. There’s the chance that the inflationary impact of events in the wider world push them further down the track, so better rates could endure. However, you can’t reliably base your saving decisions on geopolitical predictions. It’s far better to focus on your own needs: consider the kind of account you need, and then check online banks and cash savings platforms to track down the best rates available today.
What it means for resilience
If the Bank of England holds rates, it will mean no change for debt repayments and variable rate mortgages, which isn’t great news for higher earners, who are likely to have bigger burdens of both. The HL Savings & Resilience Barometer shows that the average monthly mortgage payment for the top fifth of earners is £1,065 and the average monthly debt repayment is £384. A hold would mean a big chunk of your income is still tied up covering interest payments, and can’t be spent enjoying yourself or building for the future.
There’s better news for those coming up for a remortgage. Despite expectations that we’re unlikely to see the Bank of England make a move next week, the market is still expecting two more rate cuts this year – with the first possibly as early as May. As a result, fixed term rates have been gradually falling over the past six weeks. The average 2-year fixed deal has fallen from 5.51% at the start of February, to 5.39% at the start of March and 5.35% this week, according to Moneyfacts.
The fact that mortgage deals fell slightly through December, rose a little through January and then fell again through February, underlines the value in securing a remortgage deal as early as possible. That way, if rates rise in the interim, you have locked in a cheaper deal, and if they fall, you can shop around for something better closer to the time.”
