12 Feb

Low rates 'great for borrowers'

Low rates 'great for borrowers'

Low interest rates could help to bring about a recovery of the economy, an expert has stated.

Trevor Williams, chief economist at Lloyds TSB Corporate Markets, noted that the current level of the Bank of England's official base rate benefits borrowers and may contribute to greater spending.

Last week the Bank cut the rate to one per cent - a move that could reduce the amount that needs to be repaid by mortgage holders.

"It would be great … if the cost of paying for a loan gets as low as it possibly can, because this is going to reduce your interest payments," Mr Williams remarked.

His comments follow a survey by Lloyds TSB Corporate Markets, which found that a growing number of consumers expect interest rates to have risen by next year.

The latest cut of 0.5 per cent brought the official base rate to its lowest level in the Bank's 315-year history.

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