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06/11/2008
Bank Of England Slashes Interest Rates To 3%
The Bank of England has reduced interest rates by 1.5% in a dramatic attempt to rescue Britain from the grip of recession.
The cut - which takes interest rates to 3% - follows widespread calls from industry for a major reduction, as the country faces the prospect of a deep recession. It also comes on the back of an emergency half-point cut last month.
The last time the interest rate reached the shockingly low figure was in 1955.
The central bank has not cut interest rates by more than half a point since it was made independent in 1997.
Business leaders immediately welcomed the news, from the Bank's Monetary Policy Committee (MPC), and homeowners are likely to hail the cuts.
Prime Minister Gordon Brown was asked yesterday in the House of Commons, if a cut could be passed on to borrowers.
He responded: "We want the banks and building societies to pass on the interest rate cuts to their mortgage holders.
"What we've been trying to do over the last few weeks is get the liquidity into the system, recapitalise our banks and then get them to resume the lending that is necessary."
There have been widespread concerns that the rate cut would not reach borrowers, however, Lloyds TSB have confirmed they would be passing the full 1.5% reduction to its variable rate mortgage customers.
The group - which lends through Cheltenham & Gloucester - confirmed its standard variable rate, which is at 6.5%, would never exceed 2% more than the BoE base rate.
A Council of Mortgage Lenders spokeswoman said: "The real cost of funds to lenders is determined not by the bank base rate, but by their own cost of borrowing.
"So it does not make commercial sense to insist or expect that lenders automatically 'pass on' cuts in Bank rate to borrowers, other than those with Bank rate tracker mortgages, unless and until the cut flows through to an equivalent reduction in their own funding costs."
Britain's economy has shrunk 0.5% in the third quarter, and many experts fear a recovery will not be on the horizon until 2010.
Fears of a recession were also further heightened with news of the service sector shrinking at its fastest rate in at least 12 years, and manufacturing output falling for a seventh month in a row.
While the interest cut is not likely to bring the country out of a recession, industry experts believe the news will be a welcome relief to homeowners, who have tracker mortgages.
(JM)
The cut - which takes interest rates to 3% - follows widespread calls from industry for a major reduction, as the country faces the prospect of a deep recession. It also comes on the back of an emergency half-point cut last month.
The last time the interest rate reached the shockingly low figure was in 1955.
The central bank has not cut interest rates by more than half a point since it was made independent in 1997.
Business leaders immediately welcomed the news, from the Bank's Monetary Policy Committee (MPC), and homeowners are likely to hail the cuts.
Prime Minister Gordon Brown was asked yesterday in the House of Commons, if a cut could be passed on to borrowers.
He responded: "We want the banks and building societies to pass on the interest rate cuts to their mortgage holders.
"What we've been trying to do over the last few weeks is get the liquidity into the system, recapitalise our banks and then get them to resume the lending that is necessary."
There have been widespread concerns that the rate cut would not reach borrowers, however, Lloyds TSB have confirmed they would be passing the full 1.5% reduction to its variable rate mortgage customers.
The group - which lends through Cheltenham & Gloucester - confirmed its standard variable rate, which is at 6.5%, would never exceed 2% more than the BoE base rate.
A Council of Mortgage Lenders spokeswoman said: "The real cost of funds to lenders is determined not by the bank base rate, but by their own cost of borrowing.
"So it does not make commercial sense to insist or expect that lenders automatically 'pass on' cuts in Bank rate to borrowers, other than those with Bank rate tracker mortgages, unless and until the cut flows through to an equivalent reduction in their own funding costs."
Britain's economy has shrunk 0.5% in the third quarter, and many experts fear a recovery will not be on the horizon until 2010.
Fears of a recession were also further heightened with news of the service sector shrinking at its fastest rate in at least 12 years, and manufacturing output falling for a seventh month in a row.
While the interest cut is not likely to bring the country out of a recession, industry experts believe the news will be a welcome relief to homeowners, who have tracker mortgages.
(JM)
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08 September 2005
Interest rates remain on hold at 4.5%
The Bank of England has left interest rates unchanged at 4.5%, as expected by many analysts. Last month, the Bank’s Monetary Policy Committee (MPC) reduced interest rates from 4.75% to 4.5%, amid fears of a slowdown in economic growth and a slump in consumer spending.
Interest rates remain on hold at 4.5%
The Bank of England has left interest rates unchanged at 4.5%, as expected by many analysts. Last month, the Bank’s Monetary Policy Committee (MPC) reduced interest rates from 4.75% to 4.5%, amid fears of a slowdown in economic growth and a slump in consumer spending.
10 April 2008
Interest Rates Reduced to 5%
The Bank of England's Monetary Policy Committee have cut interest rates from 5.25% to 5% to stabilise the economy as the global credit crunch reaches UK shores. The British Chambers of Commerce warned that the cut was "no longer sufficient".
Interest Rates Reduced to 5%
The Bank of England's Monetary Policy Committee have cut interest rates from 5.25% to 5% to stabilise the economy as the global credit crunch reaches UK shores. The British Chambers of Commerce warned that the cut was "no longer sufficient".
08 January 2009
Interest Rates Reach All-Time Low Of 1.5%
The Bank of England has cut interest rates to 1.5%, as it is rumoured the Chancellor is considering printing more money in an attempt to alleviate the pressures of the credit crunch. The Bank's Monetary Policy announced the cut of 0.5 percentage point, taking it to its lowest level in its 315-year history.
Interest Rates Reach All-Time Low Of 1.5%
The Bank of England has cut interest rates to 1.5%, as it is rumoured the Chancellor is considering printing more money in an attempt to alleviate the pressures of the credit crunch. The Bank's Monetary Policy announced the cut of 0.5 percentage point, taking it to its lowest level in its 315-year history.
07 August 2008
Interest Rates Held
The Bank of England has kept interest rates at 5% for the fourth month in a row in a bid to balance slow growth and rising inflation. The Monetary Policy Committee's (MPC) primary goal is to reduce the current inflation rate of 3.8% to the Government target of 2%.
Interest Rates Held
The Bank of England has kept interest rates at 5% for the fourth month in a row in a bid to balance slow growth and rising inflation. The Monetary Policy Committee's (MPC) primary goal is to reduce the current inflation rate of 3.8% to the Government target of 2%.
09 November 2007
Interest Rates On Hold But Cut Likely Soon
Mounting pressure for a cut in the UK's interest rate hasn't produced one yet, but the good news for borrowers is that the Bank of England has at least kept interest rates on hold at 5.75% and indications are that a cut is due next time.
Interest Rates On Hold But Cut Likely Soon
Mounting pressure for a cut in the UK's interest rate hasn't produced one yet, but the good news for borrowers is that the Bank of England has at least kept interest rates on hold at 5.75% and indications are that a cut is due next time.
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