A further one per cent cut in the base rate has been announced by the Bank of England’s monetary policy committee (MPC).
The move brings the base rate down to two per cent, the lowest it has fallen for 57 years.
Explaining its decision, the MPC noted that the “substantial” risk of the consumer prices index falling under the two per cent target that has been set has now increased further.
Those who chose to switch to a tracker mortgage deal – possibly as part of a debt management plan – may benefit from the reduction in rates, as it could result in their monthly repayments decreasing.
The move has been welcomed by the Council of Mortgage Lenders, which stated that although the wider economy should benefit as a result, lenders – especially non-deposit takers – may not be able to pass on the full cut as funding is still “both expensive and scarce”.
By Tom Musk