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Strong support for rate cut, minutes show

Strong support for rate cut, minutes show

Category: Loans

Updated: 23/01/2009
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 It is now over 6 months old so the content may be out of date.

Interest rates for secured loans may be set to fall further in the future, as the minutes of the Bank of England's most recent monetary policy committee (MPC) meeting have shown that all nine members backed a base rate cut.

The rate was lowered from two per cent to 1.5 per cent - a move that eight on the committee backed.

But David Blanchflower argued for an even more assertive step, believing that a one per cent reduction was necessary.

The MPC noted that many in the markets were expecting a 0.5 per cent cut and a hold or greater change would have the potential to damage confidence.

Should the body choose to lower the rate further, secured loans could become cheaper as a result.

One of the factors considered by the MPC was the declining rate of inflation and the Office for National Statistics revealed this week that the consumer prices index rate dropped from 4.1 per cent in November to 3.1 per cent last month.

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