Interest rates will be cut at least twice this year, and house prices will jump up 5%, according to leading economists.
A poll of 41 economic experts by The Times showed most predicted two reductions in the Bank of England base rate, while nearly half actually said there would be three or more cuts.
The base rate currently stands at 5.25% after the Bank’s monetary policy committee held it there three times in a row last year, and the Bank’s governor Andrew Bailey has warned it is too early to consider any reductions.
But only two economists in the survey said the Bank would leave the base rate at its present level.
Inflation has fallen to 3.9%, and is expected to drop even further towards the Government’s 2% target in the next few months.
Economists expect a decrease of 0.4% in average two and five-year fixed mortgages to have a significant impact on the market.
House price jump
Meanwhile, some economists are forecasting a rise in house prices this year as mortgage rates continue to fall.
A rise of 5% in 2024 is on the cards according to estimates by consultancy Pantheon Macroeconomics, The Times reports.
And Andrew Wishart, senior property economist at Capital Economics, said falling house prices could be “avoided altogether”.
The Neg reported that Halifax’s latest data showed house prices rose for the second month in a row in December – making a typical home £1,300 more expensive than the previous month.