9 Feb

Base rate cut was right, says expert

Base rate cut was right, says expert

The latest base rate reduction by the Bank of England was "the right move", it has been argued.

According to David Kern, economic advisor at the British Chambers of Commerce, the Bank's monetary policy committee made the correct decision in opting to implement a 0.5 per cent cut.

The reduction could result in cheaper interest payments for mortgage borrowers, particularly as Mr Kern noted that lenders are now more likely to pass on lower rates.

"By and large the banks have been rather slow before October. Since October I think they have moved quite forcefully," he explained.

And he added that the figure is unlikely to drop much further, meaning the Bank could now look at other methods to boost the economy.

The base rate has fallen from five per cent in September, with cuts in five consecutive months bringing it to its lowest-ever level at one per cent.

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