Loan news: 0% base rate a possibility
As the economy deteriorates, many economists expect interest rates to hit 1% or even 0% before long. For people looking for a loan, this might be good news.
The Bank of England’s base rate, which stood at 5% as recently as October, is now a mere 2%.
As The Times reports, the economy shrank by at least 1% in the past three months, according to the National Institute of Economic and Social Research, and this news has ‘increased expectations that the Bank of England will cut interest rates by a further full point to an unprecedented low of 1 per cent next month’.
Further down the line, ‘A base rate of zero, or close to it, is no longer seen as improbable or even unlikely’.
This could bring down the cost of loans – but this is by no means certain. “The interest rate which loan providers charge for loans depends on other factors too, such as the LIBOR rate (London Interbank Offered Rate) and confidence levels in the loan industry,” a loan expert for Think Money commented.
“Even so, a lower base rate could certainly help loan providers bring down their own rates.”
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Think Money work with a panel of lenders to offer a range of loans. If you are thinking about getting a loan, contact one of our expert loan advisers today.
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