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Bank of England Interest Rates cut to 4.5%

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http://news.bbc.co.uk/1/hi/business/7658958.stm Glad I got a tracker mortgage....splendid Read More
choc1969 Avatar
8y, 9m agoPosted 8 years, 9 months ago
http://news.bbc.co.uk/1/hi/business/7658958.stm

Glad I got a tracker mortgage....splendid
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choc1969 Avatar
8y, 9m agoPosted 8 years, 9 months ago
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#1
Clicky link
#2
Good news since its just cost each taxpayer £16,000 to prop up the very institutions that created the mess :x
#3
so how much is that saving off say a 120 grand morgage?
#4
cornish
so how much is that saving off say a 120 grand morgage?


i have just calculated my new monthly payment using this website


http://www.lcplc.co.uk/three_col_1.aspx?id=1:30571&id=10:21991
#5
cornish
so how much is that saving off say a 120 grand morgage?


About £50 a month I think/
#6
i have just moved my mortgage after a long, high interest tie in. so i was so relieved when it got accepted yesterday.

i have gone for a tracker mortage this time 0.9% above base rate. i lost so much money having a fixed deal last time.

i am saving about £80 a month now. just by ending the tie in.
#7
cornish;3146541
so how much is that saving off say a 120 grand morgage?
................ about £60 pcm ?
It's gone down by a half % ... not much, but better than going the other way !

Six central banks - including the Bank of England - have cut their interest rates by half a percentage point. No UK rate move had been expected until Thursday - and the step puts the interest rate at 4.5% from 5%.
#8
The situation worldwide is very grim hence the coordinated cuts

Fed, ECB, Central Banks Cut Rates in Coordinated Move (Update2)
2008-10-08 12:07:54.870 GMT

By Scott Lanman
Oct. 8 (Bloomberg) -- The Federal Reserve, European Central Bank and four other central banks lowered interest rates in an unprecedented coordinated effort to ease the economic effects of the worst financial crisis since the Great Depression.
The Fed, ECB, Bank of England, Bank of Canada and Sweden's Riksbank each cut their benchmark rates by half a percentage point. The Bank of Japan, which didn't participate in the move, said it supported the action. Switzerland also took part.
Separately, China's central bank lowered its key one-year lending rate by 0.27 percentage point.
Today's decision follows a global meltdown that sent U.S.
stock indexes heading for their biggest annual decline since 1937; Japan's benchmark today had the worst drop in two decades.
Policy makers are also aiming to unfreeze credit markets after the premium on the three-month London interbank offered rate over the Fed's main rate doubled in two weeks to a record.
``Central banks of the world have finally woken up to the gravity of the current situation,'' Charles Diebel, head of European rates strategy at Nomura International Plc in London, wrote in a note. ``It is potentially not the last we will see of central bank activity particularly in Europe as the macro situation is still weakening dramatically.''

Rate Levels

The Fed reduced its benchmark rate to 1.5 percent. The ECB's main rate is now 3.75 percent; Canada's fell to 2.5 percent; the U.K.'s rate dropped to 4.5 percent; and Sweden's rate declined to
4.25 percent. China cut interest rates for the second time in three weeks, reducing the main rate to 6.93 percent.
``The recent intensification of the financial crisis has augmented the downside risks to growth and thus has diminished further the upside risks to price stability,'' according to a joint statement by the central banks. ``Some easing of global monetary conditions is therefore warranted.''
Global policy makers are reducing rates as economies weaken around the world. The International Monetary Fund said the global economy is heading for a recession in 2009 and increased its estimate of losses from the financial crisis to $1.4 trillion.
The Fed's Open Market Committee, which voted unanimously for the move, said in its statement that ``incoming economic data suggest that the pace of economic activity has slowed markedly in recent months. Moreover, the intensification of financial-market turmoil is likely to exert additional restraint on spending.''

Bernanke Message

Today's move comes a day after Fed Chairman Ben S. Bernanke failed to assuage investors' concerns about the deteriorating economy by signaling he was ready to lower borrowing costs.
Fed officials, who have kept their benchmark rate at 2 percent since April, may have wanted time for their record loans to the financial industry and new programs, including purchases of commercial paper, to bear fruit before lowering rates.
Investors instead perceive the economic outlook deteriorating more rapidly, necessitating rate reductions.
The Standard & Poor's 500 Stock Index slid 5.7 percent yesterday to 996.23, after a 3.9 percent slump the previous day.
Futures on the S&P 500 rose today after the announcement, gaining
2.3 percent to 1,029.30. Europe's Dow Jones Stoxx 600 Index was down 0.7 percent after sliding 7.8 percent earlier in the day.
The declines in U.S. shares the past two days followed pre- market opening announcements of fresh actions by the Fed to unblock credit markets. Stocks tumbled in Europe and Asia today and S&P 500 futures dropped 3.4 percent to 972 points.

Fed Plans

On Oct. 6, the U.S. central bank doubled its planned auctions of cash to banks to as much as $900 billion. Yesterday, it unveiled a unit to buy commercial paper, debt used by companies for short-term funding.
Bernanke said in a speech yesterday that an intensifying credit crunch means officials must ``consider'' lowering borrowing costs.
In more typical market conditions, stocks rally when a Fed chief indicates he'll reduce rates. Now, Bernanke's message may have less power because traders already anticipated for weeks that policy makers would need to make that move, and because of rising concern even rate cuts may do little to immediately help banks scrambling to reduce their vulnerability to loan losses.
``In normal times, a rate cut would have a positive effect,'' Gary Schlossberg, senior economist at Wells Capital Management in San Francisco, said yesterday. ``What's troubling the market'' is concern about ``the solvency and losses of major institutions. The market is uneasy because it doesn't have a lot of information on what the depth of those losses will be.''
#9
blackpeppa;3146584
i have just moved my mortgage after a long, high interest tie in. so i was so relieved when it got accepted yesterday.

i have gone for a tracker mortage this time 0.9% above base rate. i lost so much money having a fixed deal last time.

i am saving about £80 a month now. just by ending the tie in.


That was lucky, I have friends who are finding it really hard getting a good quote and they have 2 incomes coming in. :?
#10
happy donkey
Good news since its just cost each taxpayer £16,000 to prop up the very institutions that created the mess :x


This isnt true.
#11
choc1969
That was lucky, I have friends who are finding it really hard getting a good quote and they have 2 incomes coming in. :?


we have been overpaying for 7 yrs with our fixed rate Northern Rock mortagage! we were stupid and thought that interest rates would go high, they never did once in the 7 yrs.
#12
snowtiger
................ about £60 pcm ?
It's gone down by a half % ... not much, but better than going the other way !

Six central banks - including the Bank of England - have cut their interest rates by half a percentage point. No UK rate move had been expected until Thursday - and the step puts the interest rate at 4.5% from 5%.


i think it will be approx £40
#13
120000 / 100 = 1200
1200 x 0.5 = 600
600 / 12 = 50

£50 a month saving on a £120k mortgage.

Obviously will depend on the exact mortgage you have etc but £50 is the figure.
#14
Benjimoron;3147223
120000 / 100 = 1200
1200 x 0.5 = 600
600 / 12 = 50

£50 a month saving on a £120k mortgage.

Obviously will depend on the exact mortgage you have etc but £50 is the figure.

ok . maths isn't exactly my strongest subject..... ! lol :p
#15
happy donkey
Good news since its just cost each taxpayer £16,000 to prop up the very institutions that created the mess :x


They like to create mess, cause messy markets enables them to make unimaginative bonuses and profits. A steady and orderly market only makes a few % a year so turbulenece cause huge ups and downs and it is good for them as they earn a % of the big changes. The smaller the change and the more steady the market is, the smaller the % that they make.

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