Economy 'set for boost when banks start to lend' - Loans - News - Moneyfacts


Economy 'set for boost when banks start to lend'

Economy 'set for boost when banks start to lend'

Category: Loans

Updated: 05/12/2008
First Published: 05/12/2008

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The Bank of England's interest rate cut is set to boost the UK economy, it has been suggested.

According to Charles Davis, economist at the Centre for Economic and Business Research, a "fair number" of banks have been passing on cuts, despite some failing to do so.

Secured loans holders set to be benefit from this, he noted, although lenders are not yet providing credit at a level that matches their deposits.

"While they are trying to reduce their debt levels and risks on the balance sheet, they are remaining very cautious in their lending, which is what is holding the economy back," Mr Davis explained.

Yesterday the Bank's monetary policy committee voted to reduce the official base rate from three per cent to two per cent.

It stated that the decision came partly as a result of falling inflation, with the slowing of the consumer prices index rate to 4.5 per cent suggesting that it may soon fall below the two per cent target.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Regulator to take closer look at high-cost credit

When used well, credit can be a viable way to help make ends meet and balance the books – but the problem comes when that credit is of the high-cost variety. The regulator has will be taking a closer look at the sector to see what else can be done.

The payday loan market is still broken

The payday loan market has been under fire a lot in recent years, and as a result, the financial regulator stepped in. But has it made a difference? Unfortunately, it looks as though there’s still a lot of work to be done.

Get a record low rate loan - if you qualify

Competition in the personal loans market is as hot as ever, so much so that one loan provider has slashed rates to the lowest on record – but only to those who fit the bill. The shopping bill, that is…