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News: Massive Interest Rate Cut Announced

Thu, 06 Nov 08

The Bank of England has announced a 1.5% cut in interest rates to bring it down to 3%, its lowest level since 1955.

It was widely predicted that the Bank’s monetary policy committee would reduce rates to stave off the effects of recession but the scale of the cut has taken many by surprise.

This latest cut follows last month’s decrease of 0.5%, which came in a coordinated move between a number of central banks.

The decision is welcome news to those already on tracker rates but there are increasing fears that even a cut of this magnitude will not be passed on in the wider mortgage market.

Following pressure from politicians the Council of Mortgage Lenders released a statement yesterday warning that a Bank of England cut will not necessarily lead to cuts in mortgage rates – see Home News 5 November 2008.

 

By Joe Lepper

See also  - Mortgages

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