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Rate cut could ‘ease financial pressure’

February 9, 2008 by admin  
Filed under News, News-Banking

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The cut in interest rates by the Bank of England (BoE) will help “ease financial pressure”, claims one financial expert.

According to the Fair Investment Company, the rate cut of 0.25 percentage points to 5.25 per cent by the Monetary Policy Committee (MPC) should help homeowners with mortgages of over £150,000 receive as much as £40 per month back.

James Caldwell, director of the company, said: “The MPC’s decision will come as a relief to many. A lot of people are facing higher living costs and business expenses, so the rate cut is an important step towards easing financial strain.”

However he added that home owners will only benefit if mortgage rates are cut in line with the BoE’s decision.

Mr Caldwell also said that savers will be worse off as a result of yesterday’s decision.

Those savers who hoped the base rate would remain the same for another month “will be disappointed”, he concluded.

However, according to the Newcastle Building Society, despite the effects of the interest rate cut, savers could benefit from the current climate of competition between banks and building societies to offer the best deal.

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