This is Money Podcast How low will interest rates go... and will they stall earlier than we think?
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Dec 19, 2025 Interest rates have dropped to a record low, sparking debate on how much lower they'll go. The team dives into what the new base rate means for borrowers and savers, and shares tips on navigating mortgages and savings. They also explore Gen Z's savviest savings hacks from social media. A warning about counterfeit goods this holiday season provides essential shopping advice, and a curious neighborly dispute raises legal questions worth considering. Tune in for financial insights and seasonal tips!
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Rate Cut But Path Uncertain
- The Bank of England has cut base rate to 3.75% but the vote was a narrow 5-4, signaling uncertainty on future cuts.
- Economists project maybe two more cuts to around 3.25% but further falls are far from guaranteed.
Lock Savings Into Fixed ISAs
- If you have spare cash, consider fixed-term savings to lock rates before they fall further.
- Use a cash ISA where possible to avoid paying 20–45% tax on interest.
Neutral Rate Is An Inflation Tool
- The Bank targets 2% inflation, so 'neutral' rates are judged by where inflation will settle, not general economic health.
- That focus explains why rates might remain higher if inflation risks persist.