The Bank of England has just announced a 0.25% cut to the base rate to 3.75% today (18 Dec 2025).
This is the signal the market has been waiting for. For independent professionals and contractors, this shift likely means improved affordability for new purchases and more competitive pricing for those looking to remortgage.
It was a close 5-4 vote. Why? Inflation's come down faster than expected (now 3.2% and heading closer to 2% by spring/summer 2026, helped by lower energy bills and fuel duty changes). Growth has basically stalled, unemployment's ticking up to 5.1%, and the labour market is loosening all signs the economy needs a bit more support. What this means for working-class families and especially contractors like many of us throughout 2026: -
Cheaper borrowing: tracker mortgages and variable loans drop straight away (roughly 15-20 less a month per 100k borrowed). Fixed-rate deals should get better when people remortgage next year.
Easier to get loans or overdrafts for tools, vans, or covering gaps between contracts banks pass on lower rates, so cashflow gets a little breathing room.
More client spending: lower rates usually encourage businesses and homeowners to start projects again, which should mean steadier work for trades and contractors as we head into 2026. -
Downside: savings interest will edge lower, and the Bank says further cuts will be gradual (maybe only one or two more next year), so don't expect miracles overnight. Overall, it's a small but welcome boost for household budgets and should help keep work flowing for contractors without the big invoice delays we have seen lately!
