Pre-Christmas rate cut more likely as inflation starts to ease and wage growth slows

“With inflation seemingly past its peak and wage growth continuing to ease, the odds of a pre-Christmas rate cut from the Bank of England are rising fast.

“Wage growth has been a crucial part of the inflation puzzle, and the Bank has been reluctant to pull the trigger on another rate cut until it saw signs that it was cooling. Now that this is happening, it removes one of the biggest barriers to reducing borrowing costs.

“At the same time, growth remains hard to find and the jobs market looks bleak, meaning the Bank may judge that now is the moment to give the economy a lift.

“For borrowers, a rate cut would be a welcome gift heading into Christmas. But for savers, time is running out to lock into the best deals before they start to disappear.

“Many savings rates are already failing to beat inflation, eroding the real value of cash holdings. That situation will only worsen if the Bank cuts rates next month, as expected, so savers should act quickly.

“Over the longer term, investing remains the most effective way to outpace inflation. And if, as expected, the Chancellor trims the annual cash ISA allowance in the Autumn Budget later this month, we could see even more savers looking to the markets for better returns.”