As many as 4.9m owner occupiers could benefit from a cut in their mortgage rate if the MPC chooses reduce rates by an anticipated 0.25% from 0.5%, an already historic low for the Bank Base Rate.
According to Council of Mortgage Lenders (CML) data, around 4.9m owner occupiers are on a variable rate mortgage with their lender, with 1.8m of these borrowers on Bank of England tracker rates. There are around 11 million mortgaged properties currently in the UK, with 83.4% of those made up of home owner loans and buy to let.
However, while the market seems certain an interest rate cut is on the cards, it is still unclear when this will actually happen. A Bloomberg survey published at the end of June revealed that investors are pricing in a 34% chance of a rate decrease today, with a 54% probability assigned to its meeting in August.
Writing in a blog post this week, Neil Wilson of online trading platform ETX Capital, said: “Most investors are betting on the Bank to launch fresh easing, possibly with a 25 basis point cut to interest rates and an expansion of the asset purchase programme.
“Carney has hinted strongly at the possibility, suggesting on the day after the referendum that easing was likely over the summer. This week he told MPs that if the outlook for the UK economy has worsened, there “could be monetary response that is consistent” with the Bank’s remit.”
The Bank’s MPC will make its interest rate announcement at noon today.