Bank of England cuts interest rates to 5%
The cut ushers in a new phase for personal finances, says interactive investor's Myron Jobson.
1st August 2024 12:43
by Myron Jobson from interactive investor
Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “The Bank of England's rate cut was decided by the skin of its teeth, with a razor-thin vote split of five in favour and four against. The cut ushers in a new phase for personal finances. With borrowing costs set to drop, households might find it easier to manage debt and enjoy a bit more disposable income. This could be the shot in the arm needed to boost consumer spending and, in turn, economic growth.
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“Those in the market for a mortgage will be jumping for joy as lower rates are likely to result in cheaper mortgage deals. Whether the cut to interest rates will result in huge drops in mortgage rates remains to be seen. However, even modest decreases could result in substantial savings for those seeking to remortgage and prospective homebuyers alike.
“The news is a welcome relief for the estimated 1.2 million people on tracker and standard variable rates, who will see an immediate reprieve in their payments.
“The reverse is true when it comes to savings rates. Britons have been earning more on their savings following the interest rate cycle, but the rate cut is likely to change the story. With further rate cuts in the not-too-distant future a distinct possibility, the simple message for savers is: act quickly to secure the best deals before they vanish.”
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