The Bank of England Cuts Interest Rates to 0.25%....

On Thursday 4th August 2016, The Bank of England cut the UK interest rate from 0.5% to 0.25%. This is the first time the rate has changed since March 2009. Governor Mark Carney also suggested that the majority of the members of the Monetary Policy Committee were supportive of lowering the rate further, should the economy continue to decline.

What will the interest rate cut mean for you? Well, that depends. A cut in interest rates is generally seen as beneficial for borrowers, but negative for savers.

If, for example, your mortgage is no longer within a fixed rate period, your monthly mortgage payments will be reduced. For every £75,000 of borrowing, your monthly repayments should reduce by approximately £10.

For savers who have, let’s say, £20,000 is a savings account, they should expect to receive approximately £50 per year less than before the cut.

The cut in interest rates has also had an impact, in the short term at least, on the value of the pound. So anyone going on holiday soon may find they get a few less sangrias for their money than they would have done this time last week!