Bank reaction to Bank of England rate cut
February 6, 2009 by Brendan
News
As was predicted by many, this week the Bank of England’s Monetary Policy Committee (MPC) has cut the interest rate yet again, from the 1.5 per cent to just 1 per cent.
This is a record low and means that in less than twelve months, interest rates have dropped by over 4 per cent.
Many of the major lenders in the UK, including the likes of HBOS, Woolwich and Nationwide, have taken an immediate decision to pass on this interest rate cut in the mortgage’s standard variable rate (SVR), which will be great news for anyone on their variable rate mortgages and the new interest rates will be in place from the 1st March.
The only bad news is that fewer than 8 per cent of the 11.7 million mortgage customers are actually on an SVR so there will still be many who do not benefit. A huge 51 per cent are estimated to be on fixed deals according to the Council of Mortgage Lenders (CML). Although these people are not benefiting, at least they have not had the worry of a turbulent past two years.
The remaining question on everyone’s lips is whether or not this interest rate cut will help our economy and revive the property market?
Written by
Brendan
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