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What the UK interest rate cut means for you, from mortgage deals to savings rates

about 3 hours ago
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The Bank of England gave millions of borrowers an early Christmas present on Thursday when it cut interest rates from 4% to 3.75%.It is the fourth cut this year following reductions in February, May and August.For the vast majority of borrowers the answer is no: more than 7.2m (86%) of Britain’s 8.

4m existing residential mortgages are on a fixed rate, which means monthly repayments will stay the same,However, the reduction will translate into lower borrowing costs for the 533,000 homeowners with a base-rate tracker mortgage,The rate they pay will fall, in line with the Bank’s cut,The banking body UK Finance reckons a typical tracker-mortgage customer (with an outstanding balance of £138,000) will see monthly payments fall by £28,77 as a result of Thursday’s decision.

The 509,000 borrowers on their lender’s standard variable rate (SVR) will have to wait and see,Although it is likely that lenders will reduce their SVRs, they are not obliged to do so,The average amount outstanding on an SVR mortgage is a lot smaller, so UK Finance estimates a typical saving of £13,88 a month if lenders follow the Bank’s cut in full,About 1.

8m fixed-rate mortgage deals are due to end in 2026,Depending on what happens with mortgage rates, many of those coming off five-year deals will probably still face a big jump in payments when they switch to a new product,However, lots of those coming off a two-year deal and switching to a new fixed deal will find themselves paying a lot less, as rates have come down substantially since early 2024 and look set to come down further over the next few months,The returns on savings are not explicitly tied to the base rate, but Thursday’s reduction is likely to be passed on to many savers who have easy-access accounts or other accounts without fixed interest rates,On Thursday morning, before the rate cut, the average easy-access savings rate was 2.

56%.However, the “best buy” easy-access accounts pay a lot more than that – up to 4.5%, according to the financial data provider Moneyfacts.Fixed-rate savings bonds involve tying up your money for between six months and five years, and typically offer some of the highest rates.On Thursday, the top one-year fixed-rate savings deals were paying a little over 4.

5%.The cost of new fixed-rate deals has been on a gradual downward trend for a little while, and many brokers expect this latest cut to accelerate that, which is good news for homebuyers and those due to remortgage soon.Simon Gammon, a managing partner at Knight Frank Finance, said: “Lenders have been trimming mortgage rates for several weeks, but today’s decision adds momentum to what we expect to be a highly competitive January.”He said banks and building societies were likely to undercut one another to attract customers, adding: “It’s not impossible that we see two-year fixed rates below 3% by spring.”The average new two-year fix is 4.

82%, according to Moneyfacts, but the best two-year rates for those remortgaging and who have a lot of equity in their property are around the 3,6% mark,Someone who took out an average two-year fixed rate on sale in February-March 2024 had to pay about 5,7%, so it is possible some of those hopping on to a new two-year deal could end up paying a rate of perhaps half what they are on now,Lorna Hopes, a mortgage specialist at the chartered financial advisers Smith & Pinching, said: “The biggest winners might be the thousands of people due to come off a two-year fixed-rate deal in 2026 – they should be able to remortgage onto a much lower rate.

”As things stand, those whose five-year fixed deal is due to end in the next few months will also benefit, but will typically still see their monthly payments rise sharply when they go on to a new product,The average five-year fix available to borrowers in March 2021 was priced at 2,75%, but some were able to obtain deals a lot cheaper than that,The average cost of a five-year fix today is 4,9%, though best-buy deals for remortgagers start at about 3.

75%,Mark Harris, the chief executive of the mortgage broker SPF Private Clients, said: “Those remortgaging in the next few months have a free throw of the dice, as rates can be booked up to six months before you need them,You can book a rate now and review prior to completion – if rates have fallen by then, you can enquire about switching to a lower rate,If not, you can keep what you have,”
foodSee all
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How to turn excess yoghurt into a silky-smooth dessert – recipe | Waste not

A delicious, gelatine-free panna cotta that saves yoghurt from the waste binI was really shocked to learn from environmental action NGO Wrap that, of the 51,000 tonnes of yoghurt that’s wasted in the UK every year, half of it is in unopened pots! The reason is our old arch enemy, date labels, which can cause confusion and trick us into thinking that perfectly safe yoghurt is not OK to eat. That’s one reason many supermarkets have scrapped use-by dates on the likes of yoghurt, but they still use best-before dates. Remember, if a product doesn’t have a use-by date, always do the sniff test before throwing it away.Today’s recipe is a light, gelatine-free version of panna cotta that’s instead set with agar agar (a type of seaweed), which gives it a soft-set texture. It’s refreshing, deliciously sour and simple to make

1 day ago
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Benjamina Ebuehi’s pistachio and cherry meringue cake recipe | The sweet spot

I’m switching up my usual Christmas pavlova this year for a slightly different but equally delicious meringue-based dessert. Discs of pistachio meringue are baked until crisp, then layered with pistachio cream and cherry compote. The meringue softens a little under the cream as it sits, giving it a pleasingly chewy, cake-like texture. A very good option if you’re after a Christmas dessert without chocolate, alcohol or dried fruit.Thanks to the viral Dubai chocolate bar, pistachio creme is quite easy to come by in most supermarkets these days; it’s already sweetened and brings a lovely, soft green colour

1 day ago
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Australian supermarket canned peaches taste test: the winner has an ‘absurdly low price’

In a blind taste test, Nicholas Jordan tastes 14 peaches in cans and plastic jars, in juice and syrup – but only one brand is worthy of decorating a pavlovaIf you value our independent journalism, we hope you’ll consider supporting us todayGet our weekend culture and lifestyle emailBefore this taste test, it had probably been 20 years since I last ate a canned peach. But unlike most things that happened 20 years ago, I have a strong memory of the experience. Canned, tinned or any packaged peaches weren’t a staple of my childhood (neither were fresh peaches – I was too fussy to like much except plain carbs, sausages, apples and ice-cream). But somehow I remember not only eating tinned peaches but loving them, soft like panna cotta and as syrupy as a gulab jamun. Not quite the same as a fresh peach but delicious in a different way

2 days ago
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All about the baby cheeses: how to curate a festive cheeseboard to remember

What should I serve on my Christmas cheeseboard?David, via emailIt will come as no surprise that Mathew Carver, founder of Pick & Cheese, The Cheese Barge and Rind, eats a lot of cheese, so in an effort to keep his festive selection interesting, he usually focuses on a specific area or region: “Last year, for instance, I spent Christmas in Scotland and served only local cheese.” Wales is up later this month. “I’m a creature of habit and tend always to go back to the cheeses I love, so this strategy makes me try new ones,” he explains – plus there’s nothing to stop you slipping in a classic such as comté in there too, because, well, Christmas.Unless you’re going for “the baller move” of just serving one glorious cheese, Bronwen Percival, technical director of Neal’s Yard Dairy, would punt for three or four “handsome wedges, rather than slivers of too many options”. After all, few have “the time or attention for a board that needs a lot of explaining”

2 days ago
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Georgina Hayden’s recipe for pear, sticky ginger and pecan pudding

While our Christmas Day dinner doesn’t deviate too much from tradition, I do experiment with the dessert. My family, bar one sweet-toothed aunt, avoids dried fruit-based offerings, so classic Christmas cakes and puddings are a hard no. Over the years, I have tried variations on yule logs, pavlovas and sherry trifles, but the biggest crowdpleaser is easily sticky toffee pudding (or something along those lines). This year, I’m making this warming, simple but decadent pear, sticky ginger and pecan pudding, which feels festive and fancy, and can happily make an appearance whenever.This can be made the day before and reheated before serving

3 days ago
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How to make nesselrode pudding – recipe | Felicity Cloake's Masterclass

A luxurious iced dessert stuffed full of boozy dried fruit, candied peel and frozen chestnut pureeThis festive, frozen chestnut puree dessert is often credited to the great 19th-century chef Antonin Carême, even though the man himself conceded that this luxurious creation was that of Monsieur Mony, chef to the Russian diplomat Count Nesselrode (albeit, he observed somewhat peevishly, inspired by one of his own chestnut puddings). It was originally served with hot, boozy custard – though I think it’s just enough as it is – and it makes a fabulous Christmas centrepiece,Prep 15 min Soak Overnight Cook 20 min Freeze 2 hr+ Serves 6125g currants, or raisins or sultanas50g good-quality candied peel, finely chopped75ml maraschino, or other sweet alcohol of your choice (see step 2)1 vanilla pod, split, or 1 tsp vanilla extract600ml whipping cream 4 egg yolks 50g caster sugar 45g flaked almonds 125g whole peeled cooked chestnuts, or unsweetened chestnut pureePut the fruit and peel in a bowl. Mony’s recipe is reported to have contained currants and raisins (though other vine fruit, or indeed any chopped dried fruit you prefer, will work), as well as candied citron, the peel of a mild, thick-skinned citrus, which is available online, as are other candied peels that are far nicer than those chewy, greasy nubs sold in supermarkets.Add the alcohol: maraschino, an Italian sour cherry liqueur, is the original choice, but Claire Macdonald uses an orange triple sec, Victorian ice queen Agnes B Marshall brandy and noyaux, an almond-flavoured liqueur made from apricot kernels, and Regula Ysewijn mixes maraschino with dark rum. Madeira, sherry, port, etc, would surely be good, too

4 days ago
businessSee all
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Leeds £2.5bn tram scheme delayed to late 2030s after government review

about 4 hours ago
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US prices continued to rise despite Trump claims they are ‘rapidly’ falling

about 4 hours ago
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US activist investor urges Whitbread review after budget tax changes

about 5 hours ago
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Bank of England cuts interest rates to 3.75% in pre-Christmas boost for struggling economy

about 6 hours ago
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Waterstones and Barnes & Noble owner looks to list booksellers on stock market

about 8 hours ago
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BP names Meg O’Neill as new CEO after incumbent ousted

about 10 hours ago