According to the deputy governor of the Bank of England, Ben Broadbent, interest rates may be reduced again before the end of 2016.
During a recent interview on Radio 4, the deputy governor was asked whether interest rates may be cut again before the year end, and he replied “that’s true”. The Bank of England base rate has been constant at 0.5% for the last seven years. However, it was recently reduced to 0.25%. The monetary policy committee had voted unanimously to cut the base rate, delivering a much need boost to home owners, although hitting savers.
The economy also received a boost as policymakers decided to buy UK corporate bonds with a value up to £10 billion. A Funding for Lending scheme was also revealed, worth up to £100 billion. While some lenders have already stated that they will be passing on the interest rate cut to customers, others are more reserved, with talks underway.
The investment director of Fidelity International, Tom Stevenson, said:
“The Bank’s efforts to steer Britain through the post-Brexit economic shock have taken it into unchartered territory.”
The actions taken were a precaution to try and prevent a recession, although some critics have argued that putting additional money into the finance system through Quantitative Easing won’t have a significant impact on the economy.
For many people who are hoping to buy a house, or existing home owners looking for a new deal, advice from a CeMAP qualified mortgage adviser will help to maximise the current interest rates.
