Bank Rate Cut By 1%
The Bank Of England has once again cut the bank rate by a massive one percentage point bringing the interest rate to just 2% which is the lowest it has been since 1951.
If the rate cut is passed on by lenders it should help millions of people who are struggling with debts and the cost of living and will make life a little easier for businesses struggling in the face of the consumer spending slowdown.
Most of the big mortgage lenders are likely to cut their rates to match the rate reduction though some mortgages which are based on the bank rate plus a percentage have limits on how low they drop. They have a limit that says the rate will not drop below a certain figure whatever the bank rate is.
It remains to be seen if the credit card companies can be bothered to cut their interest rates. They have shown little concern for doing so in the past and as we speak a typical credit card is charging around 19% and the bank rate as of today is 2%. No wonder the credit card companies can afford plush offices.
Let us hope that the credit card companies do respond and make some significant cuts in their interest rates. It would probably benefit more people than the cuts in mortgage rates though the amounts involved might be smaller.
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