Aside from the questions of inflation and economic growth, there’s one additional big reason why lots of people hope for interest rate cuts, now and in the coming months.

Many thousands of homeowners are set to see their five-year fixed term mortgage deals expire in the second half of 2025 – and given interest rates were 0.1 per cent for most of 2020, it’s fair to say the increased payments they face will be a big shock to the system.

One mortgage broker suggests the fall-out will dampen down house prices and many need to reassess their financial positions.

Ranald Mitchell, from Charwin Mortgages, said: “For many borrowers, 2025 will prove the hangover after the house party. Millions are waking up to find their cheap-as-chips pandemic mortgage deals have vanished, replaced with monthly payments that bite.

“For five-year fixers coming off sub-2% rates, some are facing £300–£500 extra a month. It’s not just a shock, it’s a financial slap. This won’t crash the market, but it will chill it. Potential movers may pause and reflect on their new monthly financials. The days of borrowing big and breezing through affordability checks are over.”

Across most global markets, shares were on the up overnight and today despite those tariffs coming into effect – the UK’s FTSE 100 is very much an outlier there, as AJ Bell’s Danni Hewson explains.

“The FTSE 100 is struggling to make meaningful progress this week, running to stand still as investors weigh the latest economic, geopolitical and corporate developments,” says Ms Hewson.

“Not helping today was several heavyweight names trading without the rights to their dividend. This held the index back despite gains on Wall Street and across Asia. Investors are largely greeting widespread tariffs taking effect with a shrug.

“The exception again was India, with the Trump administration ordering a big increase in tariffs to punish the country for buying and selling Russian oil.”

With economic growth still a struggle to find, you may hear the term “stagflation” being used.

That shouldn’t the case, says one industry expert – it’s not the situation the UK faces right now.

Will Hobbs, from Barclays private bank and wealth management, said current indicators do not suggest the UK is any more at risk of that than previously.

“Given the current margins for error in the UK’s economic dataset, it remains possible to tell almost any story you want on the UK’s economic outlook. Our optimistic [view] rests in part [with] household balance sheet and rising real incomes, both of which provide a buffer against broader uncertainty.

“Of course, there are multiple factors to consider. We, like the consensus, expect the Bank of England to cut rates, likely following a fairly even vote split.

“We would resist overuse of the term ‘stagflation’ to describe the UK’s position. The misery indices (unemployment plus inflation), looks unremarkable today relative to the experience of the last century.”

If you have money in a savings account, it’s the other side of the see-saw to mortgages: rates going down mean you’ll earn less interest.

As there’s still a bit of a fierce battle raging among banks and building societies for customers, it’s still possible to get good deals if you are happy to lock in money for a fixed period of time or contribute regular amounts, with several offering around 4.5 per cent or even more.

There are always terms and conditions to be met, so ensure it suits your circumstances, but the opportunity remains there to save and earn money at a better rate than inflation, which currently sits around 3.5 per cent.

Do be aware of the amount of interest you can earn without being taxed, though. If your savings account interest rate isn’t fixed, banks can always change the rate you get up or down.

A tax-efficient way of saving is to use a Cash ISA, where everyone has a £20,000 personal allowance each year.

Credit card repayments and bank or car loans are of course also affected by interest rates, as the amount they all charge for borrowing will be altered.

For credit card users, it’s always ideal to pay off the full amount each month if you are able to, to avoid interest being charged at all – depending on your circumstance and the account type, they can be one of the more costly ways to borrow.

Broadly speaking, as increasing interest rates over the last few years have meant mortgage repayments going up, then the reverse should also hold true: lower rates, lower repayments. However, there are several important things to note.

Firstly, that it’s only the interest on the repayments which should change — your capital repayments will naturally decrease the more you pay off your mortgage. Secondly, the base rate isn’t the rate you are necessarily charged by your bank or lender for the mortgage — they’ll base theirs off the BoE rate but it doesn’t have to be the same.

More than half a million people do, however, have a mortgage which tracks the BoE interest rate and those will see an immediate change. Far more have fixed term deals which expire each year and need renegotiating.

Additionally, if you’ve got a fixed term on a mortgage plan, you won’t see a change in any case until that comes to an end.

New mortgage products tend to be based on swap rates – future expectations of interest rates movements rather than the current Bank Rate, as it’s officially known.

New tariff rates on U.S. imports, initiated under President Donald Trump’s administration, came into effect on Thursday, marking a significant development in his reshaping of global trade.

These measures include potential tariffs of up to 200% on pharmaceutical imports and a 100% import tax on computer chips.

Significant uncertainty persists, with no agreement yet reached on tariffs for products from China.

Full details here from Elaine Kurtenbach:

George Vessey, lead macro strategist at Convera, is expecting another three-way split in the MPC voting.

But the more interesting element of the BoE’s explanation might be their guidance for what comes next, he says.

Economic growth still isn’t great, and that – plus jobs data – weighs against inflation.

“The BoE is expected to cut rates to 4.00 per cent today. However, given the mixed signals from recent economic data, we anticipate a three-way vote split, with two members favouring no change and two advocating for a more aggressive 50bps cut.

“There has not been a single unanimous vote in this cycle and this divergence reflects the tension between persistent inflation concerns and signs of economic slack.

“With the cut largely priced in, attention shifts to the committee’s forward guidance specifically, whether it will reaffirm its pattern of quarterly reductions or hint at a change in pace. The key uncertainty hanging over this meeting is the risk of a deeper deterioration in the labour market. So far, the evidence points to a gradual weakening rather than a sudden downturn. At the same time, inflation remains persistently high, especially in the services sector, adding another layer of complexity to the policy outlook.

“Overall, we expect the August forecasts to closely mirror May’s Monetary Policy Report, with only modest adjustments: inflation steady, GDP slightly higher on reduced tariff drag, and softer labour market projections.”

President Trump gave a one-week delay to his new tariff rates coming into force last week but that day has now arrived and with it comes a morning slump in the stock markets.

US stocks moved last night and Asian markets also have remained mostly strong overnight, with rises in the Shanghai, Japan’s Nikkei 225, the KOSPI in Korea and Vietnam’s VN30 – an outsized performer itself of late.

This morning however the FTSE 100 has dropped 0.2 per cent in early trading, with Germany’s DAX flat and the Euro Stoxx 50 index up 0.3 per cent.

OK here’s what you need to know in a flashcard:

Who votes: The nine MPC members of the Bank of England

What’s predicted: A 25 basis points cut, which means 0.25 percentage points off the current interest rate of 4.25 per cent, giving a new rate of 4.00 per cent

How many votes are needed: A majority, so five. A 5-4 split happened in May for example, with some voting for a double cut

When will a cut come into force: Immediately, if voted for

Gordon Brown has urged ministers to hike taxes on online casinos and slot machines to cover the cost of lifting children out of poverty.

Reforms to gambling taxes could generate the £3.2 billion needed to scrap the two-child limit and benefit cap, the Institute for Public Policy Research (IPPR) said.

The think tank’s latest research said axing the policies could lift half a million children out of poverty and “reverse years of rising hardship for low-income families”.