The reduction of the basic rate of interest by the Bank of England last week could help individuals who are in debt, it has been claimed.
National Debtline, a telephone advice service for those requiring help with their debt management problems, reported that a cut is better than in increase, with it important that lenders pass these savings on to borrowers.
Beccy Boden Wilks, a spokesperson for National Debtline, said: “The main difference that people are predicting is the impact of the credit crunch: the widely available cheaper credit that has been available won’t be as accessible.”
She added that consumers who have used cheaper credit to transfer debts around may not be able to take advantage of this option any longer.
Last week, the monetary policy committee of the Bank of England opted to reduce interest rates by a quarter of a percentage point, the first cut this year which, put interest rates at 5.5 per cent.