Loan Origin

In reaction to the Bank of England’s recent decision to cut the interest rate to 5.25 per cent, mortgage lenders announced they will pass on the savings to borrowers. The Bank of England’s decision to cut the rate was based on assisting the economy in light of the credit crisis.
Economic adviser to the British Chambers of Commerce, David Kern, explained, “The Monetary Policy Committee’s decision to cut interest rates to 5.25 per cent was necessary for the economy. In the face of worsening global and domestic conditions, a refusal to act would have entailed unacceptable risks.”
However, Mr. Kern went on to add that the cut “is not adequate on its own,” explaining that threats to economic growth are “much more acute” now than are the risks of inflation. “We would have welcomed a bold U.K. move to five per cent,” he lamented.
Consumers can still be happy with the savings they will receive from lower mortgage interest. For a £100,000 mortgage, the average savings would be £16 a month.