Low Base Rate Retained Good News For Borrowers
Borrowers can breathe a sigh of relief as the Bank of England announces their decision to keep the base rate at 0.5 percent.
For the 23rd consecutive month the base rate has been held at 0.5 percent, even though consumer price inflation has risen almost twice the pace of the Bank’s 2 percent target.
The asset purchase programme is also unchanged at £200 billion.
This is good news for those paying off debts, and gives those with mortgage repayments extra time to get their finances in order for when the rate eventually rises.
Fixed rate mortgages have increase by 0.18 percent in one month, Moneysupermarket revealed, highlighting how the market is preparing for rise in the base rate shortly.
“Continuing the freeze on interest rates is a wise move,” said Stephen Robertson, British Retail Consortium director general.
“The economy still needs all the support it can get.”
Mr Robertson added this move was necessary due to the weak level of consumer confidence following the VAT rise and inflationary pressures.
“Borrowers need to take action as soon as possible if they fear they will not cope with an increase in their mortgage repayments,” commented Clare Francis, Moneysupermarket site editor.
Consumers Worry about Future Financial Security
The Scottish Widows’ Priorities of Life Index recently showed many Brits are still unable to save for the future as they continue to pay off debts, and everyday expenses.
The study showed seven out of ten British adults are struggling to devote enough time to life priorities, with 18 million unable to save enough.
Even though the recession officially ended in 2009, financial security is still an issue as 35 percent fear they are neglecting their future to manage the present pressures, compared to 36 percent in 2010.