Home loan payers look for a rate reduction
Interest rates are likely to fall by a quarter of a percent over the next quarter, as a means to reduce the effects of the credit crunch suggests an industry analyst.
One of the UK’s most reputable economists feels confident that the BOE will have little other choice than to reduce the base rate to 5.25%. The current cost of borrowing is high, inflation continues to rise, and borrowers continue to struggle, all of which is pointing towards a correction.
A reduction in the base rate would also ease repayment burdens for many individuals who are struggling to cope with their mortgage and secured loan commitments, recent reports suggest that almost 25% of the aforementioned demographic are in desperate need of such a change, in order to keep themselves afloat.
Credit industry representatives are in little doubt that the BOE will action a reduction in the national rate of interest, as many feel that there is little other alternative as far as boosting the economy is concerned. However, a reduction is certainly not guaranteed and if rates do remain stagnant, many homeowners and loan payers may be left in a financially compromising situation.
