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Base rate cut could encourage mortgage lending
8 October 2008 14:14
The Bank of England today announced a base rate cut of 0.5 per cent, which it is hoped could encourage mortgage lending.
An interest rate decision had been due tomorrow (October 9th), but the Bank, along with five other central banks across the globe, decided to act ahead of schedule.
Several high street lenders, including Barclays, Woolwich, Halifax and Lloyds TSB quickly followed suit and cut their lending rates.
The head of mortgages for the Woolwich, Andy Gray, told the Financial Times that the base rate cut was a welcome move for millions set against the background of a slowing housing market.
He added that the move should instil confidence in the financial sector, while also helping customers with their finances.
The change will come into effect tomorrow, while borrowers on base rate trackers will see the reduction from November 1st.
Earlier this afternoon, chancellor Alistair Darling announced a £250 bail-out package for the UK's financial sector.
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