BoE cuts interest rates by 0.25 per cent

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BoE cuts interest rates by 0.25 per cent

Thu 4th Aug 2005

The Bank of England (BoE) announced today that it was cutting interest rates by a quarter point to 4.5 per cent.

This is the first time the UK has seen a rate cut since July 2003, and those Britons with mortgages and loans will welcome the move.

Mehrdad Yousefi, head of intermediary mortgages at Alliance & Leicester, said: "It is also an ideal opportunity to look for excellent value fixed rate products especially for those on a tight budget."

Halifax and Sainsbury's have already announced their mortgage rates have been cut, while others aren't so sure about what to do next.

Chris Parrish, Yorkshire Building Society’s Group Treasurer, commented: "The MPC’s decision to reduce the base rate by 0.25 per cent was widely expected but may not result in lower short term fixed rate mortgage rates."

However, overall the decision seems to rest well with both lenders and borrowers alike, with the flagging housing market now expected to make a recovery.