Interest rate reduction announced by Bank

A further interest rate reduction has been announced by the Bank of England, something that may affect people looking to handle their debt management.

At its monthly meeting, the Bank’s monetary policy committee voted to implement a 50 basis point cut, taking the base rate down to 0.5 per cent.

The Bank has also revealed that it is to begin quantitative easing, through a £75 billion asset purchase plan designed to help shore up the economy.

Credit conditions for individuals and companies have remained “tight” recently, the institution noted, adding that low confidence has also been maintained.

It went on to state that unemployment levels have risen “markedly”, which could have an influence on people’s abilities to meet bills.

Commenting on the decision, director general of the Council of Mortgages Michael Coogan explained that its effect on savers may have implications for the home loans market.

He said: “Savings are the lifeblood of mortgage lending … unless lenders can offer competitive rates to savers their ability to offer new mortgages is restricted.”

By Jamie Price