The Bank of England cut interest rates to a new record low of 1% on Thursday. While the Halifax reported that house prices rose 1.9% during January. This is in contrast with Nationwide’s figures last week which showed 1.3% drop in house prices. As the credit-crunch has shown, the supply of finance has driven up house prices. There will be no full scale recovery in the UK property market until finance becomes easier to obtain, especially for first-time buyers. And with rising unemployment, who knows what the future will bring!
Posts Tagged ‘base rate’
Base rate falls while house prices rise
Friday, February 6th, 2009Bank of England holds rates steady at 5%
Thursday, September 4th, 2008
The Bank of England left interest rates on hold at 5.0 percent for a fifth month running on Thursday. Given the speed and scale of the economic slowdown, however, most are convinced a rate cut is just a matter of time. Britain’s economy failed to grow in the second quarter of this year for the first time since the early 1990s and many analysts believe the country has already tipped into recession. With unemployment rising and real incomes falling, consumer confidence is at rock bottom and retailers are feeling the pinch.
Bank holds base rate held at 5%
Friday, July 11th, 2008The Bank of England held interest rates steady at 5.0% on Thursday, in a widely expected decision as policymakers tussle with the twin evils of a slowing economy and surging inflation. By keeping rates on hold this month, the Bank is buying itself a little more time to see what interest rate path is required to bring inflation back close to the 2% target from the current 4.1% over the medium term.
Has the Bank of England lost control?
Thursday, April 10th, 2008Some are questioning whether the financial turmoil has rendered the Bank of England powerless to direct how much the biggest financial names on the High Street charge for credit and pay customers for their deposits. For many, today’s predicted cut in base rate will be meaningless. While banks and building societies have been cutting savings rates, they have also been raising mortgage rates for new borrowers. The only people to benefit would be existing mortgage customers on the track rates which follows the movement of the base rate. The current market turmoil could however be providing banks and building societies with the opportunity to rebuild their profit margins after being hit (at various levels) by the subprime market. Once again, the consumers are paying for the cost of the financial industries’ imprudence.
