UK interest rates slashed to 3%

#1
More proof that the UK economy is in the serious pooo!

UK interest rates slashed to 3%

The Bank of England has cut interest rates in the UK by one-and-a-half percentage points to 3%, its lowest since 1955, in a shock move.

Last month it cut rates from 5% to 4.5% in an emergency move co-ordinated with other central banks.

There had been widespread calls from industry for a major cut as the country begins to face up to the prospect of a deep recession.

It is the most dramatic cut since a two percentage point reduction in 1981.

Cont/...
 
#2
(adopts Aussie accent) Crikey! (drops Aussie accent)

Oh well, it's not like it's going to be passed on through the banks anyway. Gotta love that Abbey!
 
#4
catchyerselfon said:
Well it might be passed on in their savings accounts!
That's guaranteed. Hope you got a fixed rate deal in the last couple of weeks. Quids in if you were.
 
#5
I have a tracker.....I'll be saving approx £210 a month! Happy days!
 
#6
Great news in terms of what it could do, not getting passed on by the Banks though , which is a concern.

Having said that , is it being passed on by those Banks effectively under Government control?
 
#7
Not necessarily - note articles today about Northern Rock not passing on rate reductions.

however, lets keep this in prespective - IF you currently have a mortgage, you will see reduction (as long as it's not a fixed - unlucky then!)
 
#8
whitecity said:
More proof that the UK economy is in the serious pooo!

UK interest rates slashed to 3%

The Bank of England has cut interest rates in the UK by one-and-a-half percentage points to 3%, its lowest since 1955, in a shock move.

Last month it cut rates from 5% to 4.5% in an emergency move co-ordinated with other central banks.

There had been widespread calls from industry for a major cut as the country begins to face up to the prospect of a deep recession.

It is the most dramatic cut since a two percentage point reduction in 1981.

Cont/...
Still doing better than Serbia though :D

 
#9
No sign of panic then.

Quick take your money out of savings accounts.

Buy dollars quickly because the pound could go into freefall
 
#13
This bailout malarkey is striking me more and more as a one-way street. We plough vast swathes of taxpayers' cash into saving their arrses and in return they... what?

If the banks are not going to play nice in return, I for one would like my cash back.
 
#14
smartascarrots said:
This bailout malarkey is striking me more and more as a one-way street. We plough vast swathes of taxpayers' cash into saving their arrses and in return they... what?

If the banks are not going to play nice in return, I for one would like my cash back.
Surely though if the banks don't make a profit, you won't be seeing the cash back anyway.
 
#15
Don't bank on seeing much in the way of reductions. Risk has now been re-priced to a sensible level and, whilst those on tracker mortages may see some benefits, those on fixed and variable rates, particularly new mortgagees, may actually see increases.

The days of ridiculous mortgage rates of 2-3% will not return for many years. Average rate is 8%, and although I still think we will remain below this historic average, 5-7% would be a sensible and realistic range.

It is not the function of the banks to save reckless, irresponsible, feckless or merely stupid punters from their decisions to commit to large levels of borrowing, and although some think they may have a moral responsibility to pass on cuts, the imperative is more towards rebuilding their balance sheets and eliminating risky business. This indicates that both savings and mortgage rates will remain relatively high.

Interesting article from Robert Peston below.

ehttp://www.bbc.co.uk/blogs/thereporters/robertpeston/2008/11/who_benefits_from_rate_cut.htmlven find mortgage rates going up.
 
#16
As this interest rate reduction is not going to be passed on if full(if at all),the banks will profit from this move.

Christmas is coming,and the bonuses for all the hard work by"the sucessful high flyers" in the banking industry has got to come from somewhere.
 
#17
smudge67 said:
I have a tracker.....I'll be saving approx £210 a month! Happy days!


Feckin hell smudge,how bigs your mortgage?,I only pay just over half that a month for my hovel
 
#18
Am pleased, but not as pleased as I would be if my morgage tracked the base rate, unfortunately its tracks the 3 month LIBOR(London Inter Bank Offered Rate) this has been going down slowly over the last few weeks but still way above where it usually sits in relation to base rate. Anyone else have a similar mortgage or view on what will happen to the 3 Month LIBOR on the back of the base rate reduction?
 
#19
RHODESIAN said:
smudge67 said:
I have a tracker.....I'll be saving approx £210 a month! Happy days!

Feckin hell smudge,how bigs your mortgage?,I only pay just over half that a month for my hovel
It should save me £270, and yes, my mortgage is too big thanks.

Of course, my savingsa re now worth SFA, but it makes more sense to put them into the mortgage while I can.

The above is not financial advice; I'm not trained, licenced or insured, and I get all my own advice from my Mum.
 
#20
Presumably this is also an attempt to boost bank profitability without the punters cottoning on that it is yet another subsidy? They borrow at cheap as chips rates, don't pass it on, keep the difference.

The Bank of England must be really panicking - the stockmarket is down despite the fact that the dividends from companies now look more attractive next to likely savings rates, because the city thinks a) company borrowing will notget cheaper, and b) earnings and dividends are going down.

I saw an estate agent actually having a "sale" day - they promise best prices and they claim to be moving all the auction and repossessed stuff, up to 40% off.
 

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