BoE rate cuts leave UK households £14.5 bn worse off

Bank of England rate cuts have failed to ease cost pressures on UK households, leaving them £14.5 billion worse off annually since July 2024. Despite four key rate cuts from 5.25% to 4.25%, savers lost nearly £5 billion in deposit earnings while mortgage and unsecured debt costs rose by about £6 billion. Around one million homeowners remain on fixed deals above current rates, with typical borrowers facing an extra £1,300 a year in mortgage costs over the next two years. Consumer spending, which accounts for 60% of GDP, remains subdued as households build savings amid tax-hike fears and 17-month-high inflation. Further quarter-by-quarter cuts are expected, taking the rate toward 3.5% by spring 2026.