Money News
Borrowers breathed a sigh of relief today following the Bank of England's decision to cut interest rates.
The Bank's Monetary Policy Committee announced the decision to cut rates from 5.75% to 5.5% at midday, after its latest two-day meeting. The Bank was urged to make an immediate cut by experts as a raft of new figures released this week showed the housing market and the economy are slowing dramatically.
Michael Coogan, Director General of the Council of Mortgage Lenders, commented: "A reduction in interest rates is exactly what the market needs and will benefit consumers.
"This will reduce the risk of payment shock for the 1.4 million borrowers coming off fixed rates in the next year."
Adrian Coles, Director-General of the Building Societies Association, said: "Today's rate cut indicates that the MPC believe the ongoing fragility of the credit markets is likely to affect on the wider economy in the future.
"Activity in the housing market was already beginning to slow as a result of the previous increases in interest rates, and this is likely to continue."
Among data used to persuade the Bank to cut rates was lender Halifax's, showing house prices dipped by 1.1 per cent in November - the largest monthly fall all year and the first time since 1995 the figures have fallen for three successive months.
The Halifax report is the latest in a long line of data to have emerged in recent weeks that has shown the credit crunch has stalled Britain's decade-long housing boom.
06 December 2007 © Moneyextra.com
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