Base rate cut by 0.5 per cent - Mortgages - News - Moneyfacts


Base rate cut by 0.5 per cent

Base rate cut by 0.5 per cent

Category: Mortgages

Updated: 06/02/2009
First Published: 05/02/2009

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 It is now over 6 months old so the content may be out of date.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 has lowered the official base rate for the fifth consecutive month.

A 0.5 per cent reduction agreed at the monthly meeting of the Bank's monetary policy committee (MPC) brings the rate to one per cent - a new record low.

Explaining the decision, the MPC cited an increasing risk that inflation will undershoot its target of two per cent in the medium term.

As a result of the cut, secured loan / mortgage customers could be set to see interest payments reduced, should lenders pass it on.

And clues about the future direction of the rate may be provided on February 18th, when the minutes of the meeting will reveal how each MPC member voted.

Vince Cable, the Liberal Democrat shadow chancellor, said of the move: "The Bank has to do what it can to reduce the cost of credit in the face of deepening recession. However, there is now only very limited scope for cutting interest rates."

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 Any products featured may be withdrawn by their provider or changed at any time.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

Remortgaging bounces back

Remortgaging has been enjoying a welcome boost in recent months, despite September’s slight dip, with many homeowners capitalising on record low mortgage rates to boost their finances.

Bank of Mum and Dad holds the (house) key

The Bank of Mum and Dad is an important source of finance for many young adults, and it seems that they still hold the key – in more ways than one.

Fee-free mortgages on the rise

Mortgage rates may be at record lows, but for some people, the extra costs associated can make switching deals a financial impossibility. It’ll come as welcome news, then, that the number of fee-free deals has more than doubled over the past year!