Firms cautiously welcome 1.5% rates cut moveBy Mike Pyle
November 13, 2008
Homeowners and businesses in the borough breathed a collective sigh of relief as the Bank of England slashed interest rates last week.
The 1.5 per cent cut to three per cent announced on Thursday – the largest single drop since the 50s – will reduce payments on some mortgages and business loans.
The bold move was seen as a way to ease financial pressures caused by the credit crunch but will only have an effect if banks pass it on to the customer.
Mortgage adviser Susan Ko, of Ko Mortgages in Crowthorne, said: “If you’re on a fixed rate the drop won’t affect you at all.
“If you’re on a variable rate then a lot of lenders are passing on the rate drop to homeowners, but there are still some where it is under review.
“If you’re on a tracker mortgage then most will be getting the 1.5 per cent cut.
“Anyone remortgaging will be able to get the benefit of a lot of new, more competitive fixed rates.”
Mary Flavelle, chairman of Federation of Small Businesses (FSB), said: “We called for a bold one per cent cut and this unexpectedly large cut will make an enormous difference to small firms and will put money in people’s pockets before Christmas.”
John Piasecki, owner of fashion shop Hudson Bay in Wokingham and prospective Labour parliamentary candidate for Bracknell, said: “It’s early days but the drop in interest rates should mean we have a little bit more money in the pot.
“It is definitely a good thing for small businesses.
“What we could do with now is a drop in energy prices, but I can’t see that happening.”