Lenders announced further reductions in UK mortgage rates yesterday, with more cuts set to follow, as new data reveals the number of mortgage options for borrowers has risen to its highest level since February last year.

The latest cuts come after comments by Bank of England governor Andrew Bailey last week suggested that the UK could avoid further rate rises.

Last week, Bailey told MPs that interest rates, which currently stand at 5.25% after 14 consecutive rises, were “much nearer” to the top of the cycle.

The Bank of England is expected to increase base rates by another quarter point next week but investors are split on whether there will be one further rate rise before the end of the year.

All eyes will now look to the upcoming inflation figures, which are likely to have an impact on the next Bank of England Base Rate decision. As long as the news is in line with market expectations, it’s possible that rate reductions will start to gather pace, and we could see sub-5% rates return to the market for the first time since the end of June.

The average price of a two-year fixed mortgage yesterday was 6.66%, down from 6.85% at the start of August, which was the highest level since 2008.