{"id":27200,"date":"2024-09-12T10:23:41","date_gmt":"2024-09-12T09:23:41","guid":{"rendered":"https:\/\/smh.group\/?p=27200"},"modified":"2024-09-25T12:53:13","modified_gmt":"2024-09-25T11:53:13","slug":"how-the-bank-of-englands-august-rate-cut-impacts-your-finances","status":"publish","type":"post","link":"https:\/\/devstagesite.co.uk\/smhgroup\/how-the-bank-of-englands-august-rate-cut-impacts-your-finances\/","title":{"rendered":"How the Bank of England’s August Rate Cut Impacts Your Finances"},"content":{"rendered":"

August saw the first cut in UK interest rates since March 2020. <\/strong><\/p>\n

On 1 August, the Bank of England<\/a> reduced its bank rate by 0.25% to 5.00%, marking the first cut since the onset of the Covid-19 pandemic in March 2020. The decision, made by the Monetary Policy Committee, passed with a narrow 5\u20134 vote, highlighting differing views. While Governor Andrew Bailey supported the cut, Chief Economist Huw Pill opposed it.<\/p>\n

The Bank of England was not the first of the central banks to cut rates \u2013 its European counterpart made a quarter-point reduction in June. On the other side of the Atlantic, the US Federal Reserve announced no rate change on the day before the Bank of England\u2019s move, although it is expected to reveal a cut \u2013 perhaps 0.5% \u2013 after its mid-September meeting.<\/p>\n

What the Bank of England does next on interest rates will depend on the data, to use a common central banker\u2019s excuse. The Bank\u2019s primary concern is inflation, which rose in July to 2.2% and is expected to go up further in the coming months. However, these increases are largely statistical quirks, related to falls in the utility price cap in 2023 which are not being repeated in 2024.\u00a0 The Bank\u2019s central forecast currently sees inflation at 2.4% in a year\u2019s time, then declining to 1.7% in the following year and 1.5% a year later.<\/p>\n

Perhaps surprisingly, the Bank does not publish any of its own forecasts for short-term interest rates, but instead issues tables showing what the money markets are implicitly predicting. These show bank rates down to 3.5% in three years\u2019 time.<\/p>\n

The August cut is already being reflected in instant access savings rates. Fixed-term rates have been falling for some time, although National Savings and Investments recently increased rates on British Savings Bonds (they remain relatively uncompetitive). Annuity rates are also off their 2023 highs, but still attractive compared to most of the past 15 years. If you hold more cash than you need for a rainy day or want to lock in some or all of your retirement income, the time to act is now.\u00a0 To discuss your financial planning,\u00a0contact<\/a>\u00a0our\u00a0Sheffield based Financial Advisers<\/strong><\/a> on 0114 266 4432<\/strong>\u00a0or\u00a0info@smh.group<\/strong><\/a><\/p>\n

The value of your investment and any income from it can go down as well as up and you may not get back the full amount you invested. <\/em><\/h6>\n","protected":false},"excerpt":{"rendered":"

August saw the first cut in UK interest rates since March 2020.<\/p>\n","protected":false},"author":4,"featured_media":27201,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[16],"tags":[35,69,83,97,14],"class_list":["post-27200","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-financial-services","tag-business","tag-capital-gains-tax","tag-chartered-accountants","tag-investments","tag-tax-planning"],"acf":[],"yoast_head":"\nHow the Bank of England's August Rate Cut Impacts Your Finances - SMH Group<\/title>\n<meta name=\"description\" content=\"On 1 August, the Bank of England reduced its bank rate by 0.25% to 5.00%, marking the first cut since March 2020.\" \/>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How the Bank of England's August Rate Cut Impacts Your Finances - 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