Bank of England cuts base rate

The Bank of England`s Monetary Policy Committee today announced it would be cutting its base rate by another half-point to 0.5%.

The cut is a further attempt to encourage banks and other financial institutions to lend money to businesses and individuals, which could help to revive the economy and limit the effects of the recession.

However, a number of lenders announced last month that they would be unlikely to change their customers` interest rates in line with future base rate cuts, and a number of experts have said that base rate cuts are no longer enough to tackle the economic downturn - adding that savers would be likely to suffer.

A spokesperson for Debt Advisers Direct said: “It`s less likely than in previous months that we will see significant falls in rates on mortgages and loans - apart from tracker deals, which are automatically tied to the base rate.

“The concern for many people is that savings rates are likely to fall, meaning those who rely on savings interest to supplement their income could lose out.

“However, we still advise that savings should be an important part of people`s finances. After all, any amount of savings offers better protection against falling into debt than no savings at all.”

Source

Bank of England Base Rate Cut

Economists are predicting a Base Rate Cut from the Bank of England tomorrow… those of you with Tracker Mortgages are probably hoping the same!

Mortgage lending falls 70% in one month

Statistics released by the Bank of England yesterday have revealed that mortgage lending fell by 70 per cent between September and October this year.

Read more here

CML welcomes base rate cut

The Council of Mortgage Lenders welcomes today’s decisive move by the MPC to reduce the Bank rate to 3%.

CML director general, Michael Coogan, said:

“This is a strong and decisive move by the Bank of England. They have grasped the nettle in a worsening recessionary environment.

“What is important is how this feeds through to lenders’ borrowing costs- and lenders will need to balance the interests of savers, as well - but such a sharp downward movement provides more room for lower borrowing costs more quickly.”