The 0.25 percentage point reduction comes after the rate was held at 5.25% since August of last year — four members of the committee voted to maintain the BBR for at least another month.

Members of the specialist finance industry have reacted to the latest news from the BoE:

Paresh Raja, CEO at MFS:

“The base rate has finally been cut, easing the barriers that have constrained the UK property market amid two years of high inflation and borrowing costs.

“I expect to see increased market activity in the coming weeks as a result.

“In recent months, we’ve seen a growing sense of optimism. With property prices and the volume of homes coming onto the market on the rise, today’s decision will likely encourage investors who have been holding back to re-engage.

“Despite the rate cut, however, borrowing costs remain extremely high, so flexibility for borrowers and brokers remains essential.

“Therefore, any potential rebound in the UK property market will hinge on the specialist lending sector.

“A recent survey shows that a substantial majority of bridging lenders expect loan volumes to rise over the next year.

“Given the uncertainty about future rate cuts, lenders should be offering a range of product options to accommodate brokers’ and borrowers’ needs and interest rate expectations.

“This will help them take full advantage of the opportunities created by the rate cut, even if further rate changes do not occur immediately.”

Gareth Lewis, managing director at MT Finance:

“Today’s announcement is a positive move that will surely invigorate consumers as affordability becomes more achievable.

•   Stable inflation rate “offers a sense of predictability for the economy”
•   MFS extends institutional funding lines worth over £1bn
•   House prices remain 'broadly stable' with 1.5% rise in June, according to Nationwide

“However, there must be a mindful eye kept on inflationary figures before the MPC meets again, and the government needs to play its part in continuing a positive market stimulus.”

Chris Baguley, director at Together:

“Today’s decision to cut the Bank of England base rate will be of huge importance, not only to the home-buyers and movers we support, but to SME property investors and developers who are key to providing future growth in the UK economy.

“The base rate has been increasing from record-low levels since December 2021 and, while we wouldn’t expect a return to an era of the cheap credit we’ve previously seen, today’s decision gives a clear signal that inflation has been slowly brought under control and the economy is beginning to head in the right direction.

“Earlier this week, we saw the deputy prime minister set ambitious housebuilding targets — signalling that the government is keen to get spades in the ground as quickly as possible.

“A rate reduction today will be a significant shot in the arm for many of our SME developer and investor clients, allowing them to press ahead with building the homes to meet the government’s ambitions.”

Duncan Kreeger, CEO at TAB:

“Today's interest rate announcement is extremely welcome and comes at a time of increasing market confidence. Lowering interest rates will help unlock capital, drive investment, and contribute to an improving economy.

“Reduced political uncertainty combined with changes to the planning framework and today’s interest rate decision mean that the commercial property sector is well-positioned for a busy second half of 2024.

“At TAB, we have seen increases in loan and mortgage enquiries over the last few weeks as well as more completions and we expect the Bank of England decision to be a catalyst for further activity.”