Loan Articles

It has recently been revealed that the vote to cut interest rates to record lows following January’s Monetary Policy Committee meeting was a unanimous one, and this has sparked rumour that there is likely to be a further base rate cut at February’s meeting, which will push the base rate down even further.

At 1.5 percent the base rate is already at its lowest in the history of the Bank of England, which spans over three hundred years. Some officials are now predicting that the base rate will fall to just 1 percent in February. Since October the base rate has fallen by 3.5 percent, and a further cut in February would signify the fifth rate cut in a row.

The vote for interest rates to be cut again in January came as a result of the deepening recession and the economic downturn. There are now even rumours that the base interest rate could fall to 0.25 – 0.5 percent by the summer, and one economist said that there is every chance that at some point this year the base rate could fall to zero.

He also said that the minutes from the last Monetary Policy Committee meeting did nothing to indicate that the base rate would not be coming down again in February, stating: ‘They portray a generally very downbeat view of the UK economy.’