Andrew Bailey, the Bank's governor, provided his strongest indication yet that interest rates are poised to decrease in the forthcoming months. Economists now anticipate this adjustment could occur as early as June, contingent upon the next inflation reading from the Office for National Statistics on 22 May.
The Bank's subsequent interest rate decision is scheduled for 20 June.
TSB's rate cut applies to two, three, and five-year fixed rates for both purchase and remortgage, applicable to deals up to 75% loan to value. These rates are applicable to borrowers with a minimum of 25% cash deposit or equity in their property.
At the end of April, the lender had raised its fixed rates by 0.35 percentage points, along with several other lenders increasing fixed-rate charges.
The rate cut announced today brings TSB's offerings back in line with other leading options, although its rates remain slightly above the most competitive rates available.
For instance, the lender is now presenting a two-year fixed-rate deal for home purchase at 4.89% with a £999 fee (60% loan to value), and equivalent three-year deals at 4.74%.
Moreover, its five-year fixed-rate deal for remortgage appears attractive at 4.59% with a £999 fee (60% LTV).
Matt Smith from the property website Rightmove remarked, "After a few weeks of mortgage rate increases, we’ve seen early signs that this current run of increases has peaked and we’d expect that average rates will begin to trickle down again soon.
"Inflation still seems to be heading in the right direction, a position the Bank has highlighted in its decision this week, with a view that it will fall below the 2% target in the coming months. The market is still assuming that the first Base Rate cut will happen in the summer, and today’s decision is unlikely to change that view.
"All eyes now turn to the publication of April’s inflation data (on 22 May), which is the next key milestone and is likely to determine the immediate direction of mortgage rates in the UK."
