Kingdom Bank responds to Bank of England rate cut

‘A finely balanced decision’

Governor Andrew Bailey described the decision as ‘finely balanced,’ adding, ‘It remains important that we do not cut bank rate too quickly or by too much.’

The MPC acknowledged that inflation remains elevated, now at 3.6%, and is expected to climb to 4% in September. However, Bailey emphasized that much of the inflation surge stems from temporary spikes in food and energy prices and stressed that he expected higher inflation in recent months to be short-lived.

What this means for Kingdom Bank customers

Banks usually follow the Bank of England’s base rate changes because it sets the benchmark cost of borrowing across the economy.

• Borrowers: Those on variable or tracker mortgage products will benefit as borrowing costs fall.
• Savers: Some variable rate savings product rates will be adjusted downward and those customers affected will be promptly informed.

Across the industry, this trend is consistent. Over twenty banks have already cut savings rates. Meanwhile, leading lenders are reducing mortgage rates promptly. As always, when the Bank Rate moves, most financial providers follow suit.

Pod Bhogal, Chief Market Officer, commented:

“Kingdom Bank remain committed to helping our customers use their savings to support church growth and gospel mission. While the lower base rate means a modest reduction in returns for some savers, the resulting relief for borrowers will help churches and ministry workers access mortgages they might not otherwise be able to afford.”

What’s next?

With inflation expected to peak in September and the next MPC meeting scheduled for 18 September 2025, further cuts are not guaranteed.

In summary

The 7 August Bank Base Rate cut nudges interest on both borrowing and saving downward. Borrowers gain, particularly those on flexible mortgage products. Some Kingdom Bank savers will see reduced, but still missionally aligned, returns. We continue to help our customers steward God’s resources to enable and facilitate gospel growth.

If you haven’t already, please explore our savings accounts and give your money a mission.