Interest Rates Cut – Will the Consumer Benefit?
The Bank of England is expected to make a significant cut to the key lending rate today in order to alleviate the struggle of the economy. This follows on from last month’s cut by 0.5 percentage points which saw the Bank of England join the European Central Bank and the US Federal Reserve in an attempt to bolster the economy. The interest rate cut today is expected to match last month’s cut, with a further 0.5% reduction. Many experts are arguing that this is not enough to make a significant difference and are suggesting that a cut of 1% would be more appropriate in these difficult times.
With the economy heading towards potential recession, a significant cut in interest rates could benefit consumers by directly reducing interest paid on home loans. This would likely produce a positive knock-on effect where less people would be threatened with repossession as a result of being unable to pay high mortgage costs. Unfortunately, it seems that this will not be the case as banks are reluctant to pass on the benefit of a reduced interest rate to their customers.
Last month, only half of UK banks passed on the Bank of England’s interest rate cut and it is unlikely that this statistic will change this month. Even if interest rates are cut significantly there are no guarantees that mortgage lenders will pass on the cut to consumers. As banks are unwilling to pass on these benefits it has caused speculation that banks are using the cut to the base rate as a way of protecting their own profits.
A cut in interest rates leads to the expectancy that the consumer will benefit. However, as banks refuse to lower interest rates and some banks actually increasing their rates, the consumer is once again left in a difficult situation. Abbey, one of the UK’s leading banks has announced that their tracker rate will increase by 0.5% today, despite cuts to the base rate.
If interest cuts are not passed on, the consumer will continue to suffer, with many more people every month struggling to meet the rising cost of living and mortgage payments. If you are one of those people and are finding it impossible to meet mortgage payments, Swift Capital may be able to help you.
We offer a quick solution for those struggling to meet payments or who are at threat of having their home repossessed. We will buy any house in any condition so that you are able to quickly release equity from your home. Contact Swift Capital today, we may be able to offer you the solution that you are looking for.
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