Bank of England considered bigger base rate cut

Minutes from the latest Monetary Policy Committee (MPC) meeting have shown that the Bank of England considered a larger base rate cut before settling on a 2% rate.

The MPC decided that a 1% cut was the minimum required, but avoided dropping the base rate further on the grounds that it could ‘hit the pound and undermine confidence in the economy’, the BBC reports.

It had been hoped that a base rate cut would encourage lenders to offer lower rates on loans, and while some lenders passed on some or all of the cut to their mortgages, the rates on personal loans and business loans have remained relatively unchanged.

A loans expert for Think Money commented: “Even though the base rate is at its lowest for over 50 years, lenders have still been cautious about lowering their loan rates, largely due to the relatively high cost of lending between banks.

“However, the news does suggest that there are further base rate cuts ahead – and if that happens, we may see lenders offering loans at more competitive rates.”

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Tags: loans, bank of england, base rate cut, base rate, loan

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