"Mortgage Rate Wars Bring Relief as Lenders Slash Deals and Homeowners Save"

UK mortgage rates are showing signs of decline as lenders like HSBC and Halifax reduce their interest rates, with some rates falling below 5% for the first time since April 2023. This trend reflects market anticipation of the Bank of England cutting interest rates by mid-year. Despite a drop in house prices and a sluggish economy, there is a renewed sense of optimism in the market, with an increase in lender confidence and competition. The Bank of England's data indicates a rise in mortgage approvals and consumer borrowing, suggesting potential stimulation in new borrowing. However, the economic outlook remains cautious due to various factors, including the upcoming national election and geopolitical concerns. Capital Economics has moved its forecast for the Bank of England's first rate cut to June 2024, with an expected reduction in the key rate to 3% by 2025.