Rate cut is passed on by mortgage lenders
A cut in interest rates by the Bank of England will be passed on to mortgage holders, lenders revealed.The Bank cut rates to 5.25 per cent yesterday to reduce the effect of the credit crunch on the economy.
UK mortgage lenders then announced they will be handing this down to customers -meaning a £100,000 mortgage will decrease by £16 a month.
David Kern, economic adviser to the British Chambers of Commerce, said: “The Bank’s decision to cut interest rates to 5.25 per cent was necessary for the economy.
“In the face of worsening global and domestic conditions, a refusal to act would have entailed unacceptable risks.”
He added the move is ‘not adequate on its own’ as threats to growth are ‘much more acute’ now than current inflation risks.
“We would have welcomed a bold UK move to five per cent,” he added.