UK interest rates cut to 3%

06-Nov-2008

First-time buyers (FTBs) could benefit from the effects of the Bank of England's dramatic 1.5 per cent cut in interest rates today.

The cut, from 4.5 per cent to three per cent, was larger than experts had predicted and it leaves the UK base rate at its lowest level since 1955.

It was also the biggest reduction in the monetary policy committee's history, since the Bank was made independent in 1977, and the largest reduction in interest rates the UK has seen since March 1981.

FTBs are set to benefit as the rate cut will put pressure on mortgage lenders to offer cheaper deals to borrowers.

According to the Royal Institution of Chartered Surveyors, the Bank's "bold move" recognised the severity of the economic downturn in the UK.

"This reduction in the rates should now enable lenders to pass on a significant amount of the benefit to the high street," the group said.

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