Lloyds Banking Group PLC (LSE:LLOY) boss Charlie Nunn has flagged expectations that the Bank of England will cut interest rates three times this year.
Marking a positive sign for mortgage holders, Nunn detailed the prediction to Sky News at the World Economic Forum in Davos.
Following relative stability around two to five-year mortgage deals recently, he added “stability is likely to remain for the remainder of this year” as a result.
Separate figures from Moneyfacts on Friday showed average two-year rates had edged downwards this week as banks weighed up the scope for central bank cuts ahead.
The typical two-year rate had dropped to 5.5148% as of Friday, against 5.5198% on Monday, after climbing slightly midweek.
Reductions had been stopped in their tracks earlier in the month on a bond market sell-off, which sent government borrowing costs skyrocketing.
Though jitters, sparked by fears of stubborn inflation and low economic growth, since appeared to ease with growing expectations of a February Bank of England cut, banks had been faced with rising swap rates, which determine mortgages.
“The UK economy is what I would characterise as very resilient but relatively slow growth,” Nunn added.
“That's first of all because household finances continue to strengthen [...] deposits and savings in households have increased 6% year-on-year, and cash flows for many businesses again have also strengthened in the last year.
“What we haven't yet got is investment in growth, and we still have quite a tight labour market with quite high wage inflation.”