The Bank of England is expected to hold interest rates at 4.5% when it announces its next decision at midday today.

Rates are at their lowest level for 18 months following a reduction from 4.75% last month: this was the third cut since August 2024. 

However, the Bank said it would take a “gradual and careful” approach to further reductions.

Hopes earlier this year of multiple rate cuts in 2025 have given way to less optimistic targets, according to one expert – James Enos, national account manager at Hodge Bank. 

“We have seen a steady reduction in swaps; however, the market remains unpredictable due to events both at home and overseas. The prevailing expectation is that interest rates in 2025 will largely mirror the levels seen in the past year” he cautions.

He’s also cautious on the likelihood of significant house price rises.

“Certain areas in the UK, particularly those with high demand and limited housing stock, may see slight increases in property values.

“These areas could include popular cities or commuter hotspots where demand consistently outpaces supply, driving up prices despite overall market pressures.

On the flip side, regions experiencing low buyer activity could witness price reductions.”

He says that despite all this, brokers have reported a solid level of market activity early in 2025, with many buyers and sellers remaining engaged.

But he adds: “However, it remains uncertain whether this reflects a standard seasonal surge or whether this signals a broader increase in consumer confidence and appetite to purchase.

“It will be interesting to see whether the early activity we’re witnessing is simply a seasonal bounce or the beginning of more sustained momentum in the property market, with consumer confidence playing a crucial role in shaping the housing market in 2025, and we will be closely monitoring these trends in the months ahead.”