The decision to reduce the base rate of interest to its current level of 5% was not one that was reached as unanimously as have resulted from previous MPC meetings.
Information drawn from a summary of Aprils gathering of economic heads has revealed that 60% of the voting committee urged that a reduction of 0.25 percent was adequate, whereas the remaining 30% were pushing for no movement whatsoever with an additional 10% voting on a 0.50 percent reduction.
According to impartial experts, the vote, which represents a massive indifference of opinion between committee members, may further support the theory that our countries economy is in serious doubt. On one hand, the base rate has to be reduced in order to control the home loan repayment burden, which is weighted upon the shoulders of millions of British homeowners, whereas on the other hand, a reduction in national interest will force up inflation, meaning that the daily cost of living will also increase.
The situation is further hindered through the current performance of UK’s housing market with economists predicting sizeable reductions in the value of British housing stock over the coming years. This, as you’d expect is causing further worry for homeowners and the nation in general, as the threat of negative equity becomes less of a buzz phrase and more of a reality.
