Interest Rates Cut To 4.5% By The MPC
AUGUST 8TH, 2005
| Credit Cards (introductory rate & period) |
Typical APR | Options |
| Virgin Credit Card 0% balance transfers, 13 months ( 2.9% balance transfer fee ) 0% purchases, 3 months |
15.9% (variable) |
 |
| Post Office Credit Card 0% balance transfers, 8 months ( 2.5% balance transfer fee ) 0% purchases, 3 months |
14.9% (variable) |
|
| Personal Loans | Typical APR | Options |
| Moneyback Bank Personal Loan | 5.7% | |
| Northern Rock Personal Loan | 5.8% | |
England's Monetary Policy Committee (MPC) cut interest rates having held them at 4.75% for the past year.
After concerns for the growth and consumer spending slowing down together with manufacturing moving into recession the MPC lowered interest rates by 0.25% after experts had predicted the move.
Many believe the move to be correct but some have labelled the move too little too late after the UK economy had grown below trend for four quarters in a row. This is the worst performance in a decade.
The previous interest rate hikes have finally put the brakes on consumer spending as the high streets have reported a slow down.
On the other hand the cut is great news for mortgage holders. Variable rate mortgages have already began to drop leaving average mortgage holders of £80,000 a better £12 in a pocket a month. Those on fixed rates however remain unaffected.
Savers on the other hand will be receiving less on their money because of the lower interest rates.
Analyst are suggesting that their could be further cuts in interest rates this year. They will be closely monitored because the MPC does not want to see another uncontrolled spending boom due to new dangers for the UK economy - most notably consumer debt and housing market - having at last gained control for their efforts.
