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Later rate cuts are the biggest risk to the recovery

Current fixed mortgage rates of around 4.6% are based on investors’ forecast that Bank Rate will be cut from 5.25% to 4.50% by the end of the year. We think that rates will be reduced a bit faster than that, in which case further declines in mortgage rates are in store. But it’s important to note that if rate cuts fail to materialise, mortgage rates would increase again.

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