Bold Reduction In Bank Rate
In a bold and surprising move the Bank Of England’s interest rate setting committee has cut the official bank rate by 1.5%.
In a statement released at the time they said that ‘The past two months have seen a substantial downward shift in the prospects for inflation in the United Kingdom.‘
Clearly they are concerned that there are going to be serious problems ahead causing such a cut in spending that inflation is unlikely to be the problem they previously thought.
So, the bank rate is now set at 3% while credit card rates remain around 18% and previous cuts seem to have had little impact on credit card rates.
While these rates remain so high there is little chance of indebted consumers who are struggling to repay their debts, being able to get out and spend. Spending excessively has brought us the problems we now have but at this time it seems to be in everyone’s interest to cut peoples expenses so the economy can get back to a properly working system.
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