Interest rates began to rise at the end of 2021 to help control inflation. Since then, inflation has fallen significantly and the pressures that caused the initial price rises have eased. As a result, we were able to start reducing interest rates in August 2024. Several cuts have followed since then – the latest being a reduction to 4% in August 2025.
Spending is comparatively weak right now, but inflation remains above the 2% target. We believe it has peaked and will continue to fall into 2026. If inflation stays on track, interest rates could gradually reduce further. However, as any Mortgage Broker in Chester will tell you, the timing and size of these changes depend on how the wider economy evolves. That’s why our team continues to monitor developments both in the UK and internationally to provide the best mortgage advice to our clients.
At present, the Bank of England is balancing two key risks: preventing inflation from remaining above target while avoiding a drop that’s too sharp, which could lead to the need for higher rates again later.
Inflation could stay above 2% if regulated or government-set prices, such as utility bills, rise again or if businesses increase prices to offset higher costs. There’s also a chance households and firms could expect another period of high inflation — leading to higher wage demands and price rises.
On the other hand, inflation might fall below target if spending remains weak, which could happen if households and businesses stay cautious and choose to save instead of spend. This could influence the property market and mortgage rates across the region — something A Move Brokers, your trusted Mortgage Broker in Chester, continues to track closely.
We review our interest rate decisions roughly every six weeks, assessing the state of the economy, global conditions, and upcoming trends. Key factors include:
• How fast prices are rising
• How the UK economy is growing
• How many people are in work
We will announce our next decision on Thursday 18 December 2025.
If you’re planning to move, refinance, or sell your house in Chester, now is a great time to speak to our team. Our experts at A Move Homes, leading estate agents in Chester, can help you achieve the best value for your property while our brokers secure the most competitive mortgage rates available.