The Bank of England’s Monetary Policy Committee voted today to reduce the official Bank Rate to 1 percent. Thats the fifth rate cut in a row as the UK recession takes its toll. The rate cut is good news for borrowers and struggling businesses with existing loans. Savers are hit again though as the interest recieved on money in the bank goes down yet again.
I welcome the rate cuts as the interest I pay mortgages of mine seem to be getting lower and lower in the last few months. One of my mortgages with BMS is at 0.95% below base. Thats at an amazing 0.05% of interest. I think my monthly payments will probably be in the region of £50 a month, thats almost too good to be true! I’m also curious as to what will happen if the base rate drops again to lets say 0% then the interest on my mortgage would in theory be – 0.95% Would BMS then actually pay me every month instead?? That would be very nice!
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So let me get this straight. The reason we are in this mess is central banks gave out lower then market interest rates. Which in turn caused a massive housing boom.
We are going to give even lower rates to turn around the inevitable crash.
Sounds like sound economics to me….IF you want to destroy your country.
I agree that the banks don’t have a choice at this point. Credit is already tight, if they don’t drop the base rate the economy will not get going on its own.
@Sam ~ The housing industry supports a huge percentage of the economy. While a “boom” is not ideal in the long run, a boost is necessary to get things going. Drastic times call for drastic measures.
With UK house prices on the slide I dont think i have any chance now to sell my flat for a decent price.
Interests rates continue to drop worldwide. Its crazy. I don’t know where the global economy is going.
its 0.5 now…………wow