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Secured loans holders may see "drastic action"

Secured loans holders may see "drastic action"

Category: Loans

Updated: 24/12/2008
First Published: 22/12/2008

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 It is now over 6 months old so the content may be out of date.

Secured loans customers could be set to see rates drop as the Bank of England is forced to take further action, it has been suggested.

At a meeting of the Bank's monetary policy committee (MPC) earlier this month, the official base rate of interest was lowered to two per cent.

But Jonathan Loynes, chief European economist at Capital Economics, has suggested that it could continue to drop.

His comments come following the US Federal Reserve's decision to set a target range for its equivalent rate of between zero and 0.25 per cent.

"Such drastic action is an indication that we may have to consider similar sorts of policies here because, after all, our economy is just as weak as the US economy," said Mr Loynes.

Announcing the decision last week, the Federal Reserve noted that inflationary pressures had diminished, something that has also been key to the MPC's actions.

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