Latest UK Interest Rates Forecasts and Predictions for Home and Property in the UK

Current UK Interest Rate: 5.00%

UK Interest Rates Forecast: Cut to 4.75% possible in June

Bank Rate Stays Fixed At 5%

The Bank of England Monetary Policy Committee announced on Thursday that the base interest rate would remain at 5% in May.

The decision was widely-expected, with most analysts expecting a cut to 4.75% next month, in June. Once again, inflationary pressures were cited as the reason for the decision - with fuel and food prices rocketing and inflation well above its 2% target.

On the other side of the fence, those advocating a rate cut had plenty of ammunition too - but perhaps none so directly relevant to the MPC's primary responsibility of controlling inflation.

Manufacturing output was down 0.5% in March, according to the Office of National Statistics, as was industrial production, which declined 0.2% in the first quarter. Consumer confidence is down 22% on this time last year, according to the latest survey by Nationwide. 60% of those surveyed by the mortgage lender believed that now is not a good time to make a major purchase.

The advocates of rate-cutting will probably have their way next month - but the Bank of England is having to perform a fine balancing act and a lot may change between now and then.

Speaking to The Guardian, chief economist of the Institute of Directors Graeme Leach said he believed that the MPC had made the right decision: "Inflation is far from dead and we cannot be sure as yet whether the economic slowdown underway will be sufficient to bring it under control. By waiting a little longer to reduce interest rates the MPC is hoping to squeeze demand and inflationary expectations a little tighter. Back-to-back interest rate reductions would have given a signal that inflation was yesterday's problem when in reality it is still today's and tomorrow's."

It can be difficult to accurately forecast the movements of the UK property market and to predict forthcoming changes to interest rates – that is why each week we analyze all the latest expert opinion on the state of the UK property market and condense it into a short, easy-to-read UK Property Market Forecast. We also do the same for UK interest rates, and each week produce an Interest Rate Forecast which provides the latest interest rate forecasts and predictions for the UK.

Understanding the factors that are influencing interest rate and property market forecasts can give you an advantage when considering a property purchase. The UK property market is affected by a number of different factors, which combine in sometimes surprising and quite localised ways. Our weekly UK Property Market Forecast takes all of these into consideration and provides a mixture of national and local property market forecasts.

In much the same way, movements to UK interest rates can sometimes be forecast. We provide the latest interest rate forecasts and predictions from leading UK experts, together with comment on what it all means and how factors like inflation and energy prices are influencing interest rate forecasts.