Bank of England Cuts Interest Rate to Historical All Time Low

Bank of England Cuts Interest Rate to Historical All Time Low

The Bank of England took action against the current coronavirus pandemic by cutting the standard base interest rate again. It is the second cut to the rate in just over one week. The previous cut of 0.5% had put the rate at 0.25%. It has now been cut to the lowest rate ever in the 325 year history of the Bank and now rests at 0.1%.

It was stated that this might not be the last measure taken to help fight against the impact of the pandemic and further action could be taken in the near future.

The Bank stated, “The spread of Covid-19 and the measures being taken to contain the virus will result in an economic shock that could be sharp and large, but should be temporary.”

Andrew Bailey, the Bank of England Governor, stated that the recent emergency meeting to further cut the standard base rate was required after the financial markets became borderline disorderly.

Mr. Bailey remarked, “We've seen very sharp moves in financial markets in the last few days, which is the pace of which frankly, was increasing very rapidly. And we were moving into conditions that were if not disorderly, frankly, bordering on disorderly let me put it that way.”

The Bank of England’s Monetary Policy Committee will meet again next week.

For those that are considering remortgages, expecting a large drop to remortgage interest rates might not happen right away. Rates are already very low and attractive. However, there is expectation of lenders pushing remortgage deals into better rate levels to draw the attention of homeowners for demand is expected to grow.

Now is the time to start shopping around so a homeowner can be well educated as to what is available. Lending has not tightened and rates are at a low level, so for some now is the time to remortgage and for others the best time will be very soon which will require homeowners to be ready to take advantage of the opportunity when it appears and before it disappears.

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