Mortgage rates fall following Bank cut

06-Dec-2007

The Bank of England has announced that interest rates have been cut to 5.5 per cent for December, giving first time buyers something of an early Christmas present.

Pressure to make a cut had been mounting since the start of the week, when research from the likes of Halifax and Nationwide found that house prices and consumer confidence both took turns for the worse this month.

The Bank had previously raised rates five times since August 2006, putting the base rate at a six year high of 5.75 per cent, but its announcement was soon followed by mortgage reductions from both Nationwide and Halifax, providing a boost to those looking for the best first mortgage.

"The recent flurry of markedly softer data and survey evidence relating to the services sector, consumer confidence and the housing market has clearly raised fears within the MPC that there is an increased risk that growth could slow sharply over the coming months," commented Howard Archer from Global Insight.

"We expect a further rate cut in February and two additional cuts before the summer, taking rates down to 4.75 per cent in the last quarter of the year," added Jonathan Said from the Centre for Economics and Business Research.

The cut, the first since August 2005, led Nationwide to similarly decrease its own base rate by 0.25 per cent, down to 6.99 per cent. Halifax, meanwhile, has reduced its standard variable rate from 7.75 per cent to 7.5 per cent.


http://www.firstrungnow.com/news/rate-change-ignorance-3614.aspx.


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