Bank rate cut gets frosty welcome from experts

06/02/2009

The Bank of England's decision to cut interest rates to a new all-time low has met with a mixed response from financial experts.

Yesterday, the Bank reduced rates to just one per cent, down from the previous level of 1.5 per cent.

This is likely to make tracker and variable rate mortgages cheaper to repay than they are currently - therefore limiting repossessions numbers.

Over recent months, the Bank has slashed rates from a high of 5.5 per cent, as it works to cut loan repayment costs.

However, David Kuo at financial website Fool.co.uk said that more needs to be done to help out UK householders.

"The government [should] cut consumer and business taxes before it is too late," Mr Kuo said.

"Tax cuts would provide an immediate stimulus to business and a much-needed boost to household finances."

Andrew Hagger of Moneynet.co.uk added: "You really have to question if there is any point in pursuing this panic driven, rate slashing strategy, as apart from the fortunate minority on a base rate tracker mortgage, everyone else, whether they are a saver or borrower, is getting a poorer deal."

Tags; Debt Management and Banking, Young Family Finances, Retirement Money Problems, Credit Card Lifestyle, Recent Graduate Debt,

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