Lloyds TSB says rates will not fall below 0.5%
www.moneynews.co.uk > Banking > Lloyds TSB says rates will not fall below 0.5%
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Lloyds TSB says rates will not fall below 0.5%
Tue 3rd Mar 2009
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According to Trevor Williams, an economist at the bank, 0.5 per cent is the lowest the base rate can go without the risk of damaging operations in the money market.
He said: "Money markets need a margin above [which] to transact the cost of mortgage lending so I think half a per cent is about as low as the authorities are likely to go."
The base rate currently stands at one per cent, the lowest interest rate set by the Bank since it was founded in 1694.
Last month, the Bank's monetary policy committee voted to cut interest rates by 50 basis points.
As part of an effort to revive the UK economy amid the ongoing effects of the global credit crunch, the Bank has cut interest rates down from a level of 5.5 per cent since last January.
Some borrowers of variable-rate mortgages have benefitted in the form of lower monthly repayments, but stricter borrowing criteria set by lenders means some would-be first-time buyers and low-income households have struggled to secure home purchase loans.
Click here for more mortgage news
Related News : Banking |
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Related News : LloydsTSB |
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