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The Bank of England may have held the base rate last week but with inflation now at 2% and the General Election just a week away, there are hopes that an interest rate cut could come in August or September.

Lenders are already looking to drum up business, with Barclays, HSBC and Coventry Building Society cutting rates earlier this week.

Barclays currently offers the lowest rate on the market for buyers at 4.23% for a five-year fix on a 60% loan-to-value.

Average rates are still at 5.96% for a two-year fix and 5.53% for five years, according to Moneyfacts.

Nicholas Mendes, mortgage technical manager for broker John Charcol, suggested more cuts are coming.

He said:  “We can anticipate that lenders will escalate their strategies significantly over the next few weeks.

 “Following last week's Monetary Policy Committee (MPC) decision and with important wage data and general election results on the horizon, markets are likely to anticipate further reductions in bank rates. On Friday, the 5-year money rate was at 3.82%, indicating that lenders certainly have room to lower 5-year fixed rates even further from their current levels.

“Interestingly, last week saw SONIA swaps holding steady at 5.2% since May 7th—the longest stable period since the benchmark's inception in 1997. This stability has enabled lenders to avoid continuous repricing and focus on enhancing their service levels in preparation for the next repricing battle, reminiscent of earlier this year.

 “The timings of competitor repricing will likely be from next week, considering the forthcoming general election announcement.”