Bank of England cuts interest rates to 2%
The Bank of England’s Monetary Policy Committee (MPC) has cut interest rates by 1% to 2%, their lowest level since 1951.The reduction follows a huge 1.5% cut last month and a 0.5% decrease in October in an emergency move co-ordinated with other central banks.
Adrian Coles, director-general of the Building Societies Association, said: “Homeowners will welcome the decision to cut the Bank Base Rate to 2%. However, not all mortgage borrowers will find the fall mirrored by their lender - building societies have to balance the interests of borrowers and savers. Although low interest rates are good news for borrowers, they are not so good for savers.”
Karen Barrett, marketing director at Impartial, said: “The cut will certainly be good news for those currently on tracker mortgage deals as they will probably see their repayments continue to decrease.
“We anticipate that pressure from the Government will also result in lenders passing on this rate cut so those mortgage holders on a standard variable rate mortgage.
“For those looking to buy or remortgage – especially all those on fixed-rate deals who won’t have seen the benefit of recent rate cuts – it may become harder to find competitive deals as lenders tighten their lending criteria and limit their attractive tracker and fixed-rate deals as LIBOR rates fail to keep pace with the Bank Base Rate.”