Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

The Bank of England has delivered its verdict on Rachel Reeves’ Budget: it will bring higher growth and higher prices in the short term, and new uncertainty over the outlook for the economy further ahead.

The UK chancellor’s £70bn boost to spending has reinforced the monetary policy committee’s caution about the scope for further interest rate cuts, following the reduction from 5 per cent to 4.75 per cent on Thursday.

Budget measures will add 0.75 percentage points to GDP and around 0.5 percentage points to consumer price inflation in a year’s time, the MPC said. But the impact of the biggest tax change — the £26bn increase in employers’ national insurance contributions — is much harder to assess.

Policymakers, already wary of cutting rates too fast in the face of persistent wage pressures, want to see how businesses respond to a change that will make it much more expensive to hire low-wage workers.

“A gradual approach to removing monetary policy restraint will help us to observe how this plays out, along with other risks to the inflation outlook,” governor Andrew Bailey told reporters on Thursday.

The MPC’s new forecasts show consumer price inflation will be running at 2.7 per cent in the final quarter of 2025 — well above its previous forecast of 2.2 per cent. It will fall below the 2 per cent target only in mid-2027, a full year later than the committee expected in August. The higher inflation is largely because of the combined effects of the Budget measures.

The main driver is the big, front-loaded increase in government consumption and investment, which will pump up demand in the near-term, while any improvements in the supply capacity of the economy will take much longer to materialise.

The MPC now expects spare capacity in the economy to open up later, and to a smaller extent, than it expected in August — on the face of it pointing to a slower pace of rate reductions in the coming quarters.

The inflation forecasts also reflect the direct effects on prices of the rise in the cap on bus fares, the introduction of VAT on private school fees and the increase in vehicle excise duty, which will all take effect next year.

Plans to increase fuel duty in line with inflation from 2026 are also factored into the BoE’s new forecast, although previous chancellors have repeatedly failed to follow through on fuel duty uprating.

Far more uncertain, however, is the effect of the chancellor’s big tax hike on businesses through employers’ national insurance contributions.

Employers could respond in several ways, Bailey said: by raising prices, accepting lower profits, improving productivity, holding down wages or cutting employment. The overall effect was unpredictable as it would rely on the strength of consumer demand and workers’ bargaining power.

“There is obviously a lot we will learn about the effects of the Budget as they pass through. It’s important we all have the time to do that,” he said.

Clare Lombardelli, the BoE’s deputy governor for monetary policy, noted that the effects would differ between sectors: “It is very uncertain . . . we will want to observe it and talk to businesses about precisely how they plan to respond.”

The BoE’s task will be all the harder because poor data means it is still very hard to assess how strong the jobs market is, and whether workers are in a position to resist attempts to squeeze their pay.

Economists said it was striking, given the material impact of the Budget measures, that the BoE had not signalled any change in its policy stance, with Bailey saying it would not be right “to conclude that the path for interest rates will be very different due to the Budget”.

Its forecasts are premised on market expectations for interest rates in the run-up to the Budget, which implied the benchmark rate would fall to 3.5 per cent in three years.

Since that forecast was finalised, market expectations for bank rate at the end of 2025 have risen by nearly 0.5 percentage points.

But Sandra Horsfield, economist at Investec, said the implications of the two major developments since the BoE’s August forecasts — the UK Budget and US election — remained far from clear.

She said: “The MPC has chosen a middle path as its baseline, but stressed uncertainties on both sides — and its willingness to react should that judgment be wrong.”

A HUGE open-air museum has been named one of the UK’s top Christmas breaks for 2024.

Visit England named Beamish as one of eight “uber-festive” places Brits should visit this year.

4

4

Advertisement

According to Visit England, the eight attractions each offer something different from “festive light trails with your mates, Christmas afternoon tea with your mum, romantic evenings at German Christmas markets and December days out with the kids to meet Santa”.

And one of the places in Visit England‘s top picks is the “living museum” of Beamish in County Durham.

The huge open-air museum allows visitors to see what life would have been like in the UK between the 1820s and 1950s.

From November 23 until December 24, its replica homes, pubs, shops and businesses will be transformed into a huge festive attraction.

The sprawling 300-acre estate will be decked out with golden fairy lights, pine garlands and a huge Christmas tree

Some of the replica homes will be set for Christmas too with traditional grub on display.

Visitors can sample some retro sweets at the 1990s town sweet shop and listen to festive music in the countdown to Christmas.

The northern attraction will also be serving a range of “yuletide treats”.

Even though there aren’t any specifics on its website, its onsite team rooms will most likely be serving traditional mince pies and other baked goods.

For younger visitors, Beamish will also play host to the big man himself with a Christmas Grotto.

Father Christmas will be meeting kids inside his grotto at Rowley Station Goods Yards. Grotto visits cost an additional £8 per child.

The Visit England website reads: “Experience wonderful festivities and enjoy a wintery stroll around the open-air museum grounds, made extra special by the unique surroundings.

“Afterwards, see the traditional decorations, enjoy festive treats and find that perfect present for someone special.”

Beamish will also be open for evening visits on set days throughout December for visitors who want to experience the open-air attraction after dark.

Previous visitors have been impressed by the festive offering at Beamish, with one writing on TripAdvisor: “Beamish is a yearly festive visit for us of which this year we were truly blessed to waddle around the day after a sprinkling of snow.

“It was truly magical and added to the Christmas spirit.”

Another added: “We have been to visit at Christmas and I have to say it is one of the best Santa experiences our kids have been to.”

One of the main reasons it remains so popular is that its tickets are all annual passes.

From £17.35 for kids, £27.95 for adults, or £71 for a family of four, ticket holders can visit the museum as many times as they like for a year following the day of their first visit.

One of the best Santa experiences our kids have been to

Visit England named seven other places in its list of top festive days out, including Winchester, Chester, Norwich and York.

The four cities were praised for their Christmas Markets, with wooden stalls and chalets descending on each destination every year.

The chocolate-box villages of the Cotswolds like Broadway, Chipping Camden and Bourton-on-the-Water were also named as top places for a festive day out by Visit England.

Bourton-on-the-Water celebrates the festive season by putting a Christmas tree in its river.

The tiny Cornish village of Mousehole also made the cut thanks to its sea light show.

Also on the list was Mompesson House in Salisbury, with its Dickensian-style rooms hosting festive activities.

Meanwhile, this travel writer thinks their hometown has the best Christmas attraction in the UK.

A city in Germany has been dubbed “Christmas city” because it has one of the world’s oldest and most famous Christmas markets.

4

4

MORTGAGE lenders have raced to slash their rates after the Bank of England cut interest rates to 4.75% this afternoon.

This move will immediately benefit thousands of mortgage customers with Halifax, Lloyds Bank, and Metro Bank, who will see a decrease in their repayment amounts.

1

Plus, customers with Barclays, Coventry Building Society, Leeds Building Society, Nationwide, NatWest, Skipton, and Virgin Money can also expect changes in the coming days and weeks.

It comes after several lenders cut their fixed mortgage rates in anticipation of interest rates falling for the second time in four years.

For example, Santander and Accord mortgage cut their fixed-rates by up to 0.36%.

Earlier this afternoon, the Bank of England‘s (BoE) Monetary Policy Committee (MPC) cut the base rate by 0.25 percentage points from 5% to 4.75%.

Lenders use the base rate to set their interest rates for savings and borrowing costs, including mortgages.

This reduction means millions of mortgage holders will see their bills decrease.

The central bank’s decision comes after the Office for National Statistics (ONS) reported that inflation stood at 1.7% in September, well below the BoE’s 2% target.

Interest rates had previously risen from historic lows of 0.1% in December 2021, peaking at 5.25% in July 2023, as part of efforts to reduce inflation to the Bank’s target.

A fall in interest rates usually leads to a decrease in mortgage interest rates.

However, the reduction you’ll see depends on the type of home loan you have.

Those on tracker and standard variable rate (SVR) mortgages typically see an immediate change in payments.

A tracker mortgage is a type of variable mortgage where your monthly payments rise and fall in line with the Bank of England base rate.

With a tracker mortgage, you’ll usually pay the base rate plus an additional percentage in interest each month.

A standard variable rate mortgage is what you revert to once any initial mortgage term ends.

This rate will change in line with the base rate and is usually higher than any initial introductory rate.

There are currently 643,000 customers on tracker mortgages and 624,000 on SVRs.

TotallyMoney states that today’s 0.25% rate cut will immediately save homeowners £32 a month or £382 a year on the average tracker mortgage.

Those on fixed-rate mortgages won’t see any changes until their deals end and they take out a new one.

Even if your lender has cut rates, the date your repayments actually change will depend on when your payment is due.

We’ve listed all the lenders cutting mortgage rates below.

BARCLAYS

All of Barclays’ UK residential and buy-to-let mortgage products are fixed or otherwise track the BoE base rate.

Therefore, whenever the base rate goes up or down, customers on tracker rates will see their interest rate change accordingly.

If you’ve got a tracker or variable rate mortgage with Barclays, your mortgage rate will fall by 0.25% on December 1.

For new customers, the rates will be amended from November 8.

The lender’s fixed-rate mortgages remain unchanged.

COVENTRY BUILDING SOCIETY

Following the Bank of England Base Rate change, all Coventry Building Society mortgages that track the Base Rate will automatically decrease by 0.25%.

This will take effect from 1 December.

The building society said that all the rates offered on its standard variable mortgages are currently under review.

The lender’s fixed-rate mortgages remain unchanged.

HALIFAX

Where a customer has a mortgage that tracks the bank base rate, their rate will be cut with immediate effect in line with their terms and conditions.

The Halifax Homeowner Variable Rate (HVR), currently at 8.49%, will decrease by 25 basis points to 8.24%.

The Halifax Standard Variable Rate (SVR), currently at 8.49%, will also decrease by 25 basis points to 8.24%.

The changes to the SVR rates above will come into effect for existing customer accounts from December 1.

The lender’s fixed-rate mortgages remain unchanged.

LLOYDS BANK

Where a customer has a mortgage that tracks the bank base rate, their rate will be cut with immediate effect in line with their terms and conditions.

The Lloyds Bank Homeowner Variable Rate, currently at 8.49% will decrease by 25 basis points to 8.24%.

The Lloyds Standard Variable Rate, currently at 7.00%, will decrease by 25 basis points to 6.75%.

The changes to the SVR rates above will come into effect for existing customer accounts from December 1.

The lender’s fixed-rate mortgages remain unchanged.

METRO BANK

A Metro Bank spokesperson said: “In line with the Bank of England decreasing the base rate from 5% to 4.75% we’re updating all retail mortgage products that track the Bank of England base rate.

“We are confident that our wide range of mortgages continue to meet our customers’ needs but we encourage anyone who may be worried about their payments to get in touch to discuss their options.”

These changes have come into effect immediately and will be reflected in your next monthly payment on impacted accounts.

Metro Bank said it would formally confirm the changes on its website, and all impacted customers would receive communications about them over the next couple of days.

The lender’s fixed-rate mortgages remain unchanged.

NATIONWIDE

Mortgage customers on Nationwide’s standard mortgage rate (SMR) will decrease by 25 basis points.

The new SMR of 7.49% will come into effect on December 1.

Rates on tracker mortgages held by existing customers automatically decrease when the Bank rate is cut, so these will decrease to reflect the Bank rate change from December 1. 

The lender’s fixed-rate mortgages remain unchanged.

NATWEST

A NatWest spokesperson said: “Following the Bank of England base rate cut, we will be passing on the rate cut in full to our customers on a standard variable rate (SVR) mortgage.

“The SVR will be reduced from 7.99% to 7.74%, effective from December 1.

“SVR customers may also be able to save money by switching to one of our fixed-rate mortgages.”

The lender’s fixed-rate mortgages remain unchanged.

SKIPTON BUILDING SOCIETY

Customers who have mortgages which track the Bank of England base rate will see their account interest rate change in line with their terms and conditions.

For most base rate tracker products, rates will be decreased no later than 14 days from today (November 7).

Skipton’s current, on sale base rate tracker mortgage products will continue to be available until 10pm on Sunday, November 10.

The new rates reflecting the 0.25% Bank of England base rate cut will be available from Monday, November 11.

The lender’s fixed-rate mortgages remain unchanged.

VIRGIN MONEY

Virgin Money is writing to customers who have a mortgage directly linked to the Bank of England base rate to confirm their new monthly mortgage payment and interest rate.

Any new rates set will take effect from January 1.

The lender’s fixed-rate mortgages remain unchanged.

How to get the best deal on your mortgage

IF you’re looking for a traditional type of mortgage, getting the best rates depends entirely on what’s available at any given time.

There are several ways to land the best deal.

Usually the larger the deposit you have the lower the rate you can get.

Advertisement

If you’re remortgaging and your loan-to-value ratio (LTV) has changed, you’ll get access to better rates than before.

Your LTV will go down if your outstanding mortgage is lower and/or your home’s value is higher.

A change to your credit score or a better salary could also help you access better rates.

And if you’re nearing the end of a fixed deal soon it’s worth looking for new deals now.

Advertisement

You can lock in current deals sometimes up to six months before your current deal ends.

Leaving a fixed deal early will usually come with an early exit fee, so you want to avoid this extra cost.

But depending on the cost and how much you could save by switching versus sticking, it could be worth paying to leave the deal – but compare the costs first.

To find the best deal use a mortgage comparison tool to see what’s available.

Advertisement

You can also go to a mortgage broker who can compare a much larger range of deals for you.

Some will charge an extra fee but there are plenty who give advice for free and get paid only on commission from the lender.

You’ll also need to factor in fees for the mortgage, though some have no fees at all.

You can add the fee – sometimes more than £1,000 – to the cost of the mortgage, but be aware that means you’ll pay interest on it and so will cost more in the long term.

Advertisement

You can use a mortgage calculator to see how much you could borrow.

Remember you’ll have to pass the lender’s strict eligibility criteria too, which will include affordability checks and looking at your credit file.

You may also need to provide documents such as utility bills, proof of benefits, your last three month’s payslips, passports and bank statements.

THE popular Cadbury advent calendars have been slashed to a mere £1.25 at a bargain supermarket.

A savvy chocolate fan shared the bargain find on the popular Extreme Couponing and Bargains UK Facebook group, where users frequently post the best deals they find in stores across the country.

2

2

Advertisement

Iceland shoppers are raving after a country-favourite advent calendar has been slashed to only £1.25.

In their ‘Deal of the Week’, Iceland is offering a buy one get one free deal on their 24-day Cadbury Dairy Milk calendar for £2.50.

This equates to only £1.25 for each calendar.

Comparatively, Aldi are selling the same calendar for £1.99 and Asda for £2.

And on the even pricier side, Sainsbury’s and Ocado have priced the calendar at £2.25.

The shopper’s Facebook post to the UK bargain group received hundreds of likes and comments from fellow chocolate fans.

One user said: “Ooh I need this!”

Another commented: “In-store offer too, I grabbed a few today.”

And: “I got 4 of these today!”

The user who initially made the post was unsure whether it was just online and not in-store.

One commenter said that it was a maximum of six calendars per person in store.

On the calendar’s product information on the Iceland website, it says that prices and promotions may vary for those online.

It’s also recommended to check your local store before visiting.

Elsewhere, B&M shoppers are rushing to buy festive chocolate treats that are perfect for kids’ Christmas Eve boxes.

The bargain retailer’s festive selection box has social media users going wild as they plan ahead for Christmas.

The find was posted on the NewfoodsUK Facebook group and it quickly amassed over 3,000 likes and 1,000 comments.

One user wrote: “I love these and will definitely buy two for my sons’ Christmas Eve boxes. I love creating their boxes.”

Of course, do bear in mind it’s still pretty early in the year and further deals will no doubt be released in the coming weeks.

It always pays to compare prices so you know you’re getting the best deal.

Prices can also vary day to day and by what deals are on at the time, plus remember you might pay for delivery if you’re ordering online.

You can compare prices on platforms like Google Shopping and Trolley.co.uk.

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.