%^$%&$ me - Interest rates at 3%

[Oneeyedvic]

The Bank of England has cut interest rates in the UK by one-and-a-half percentage points to 3%, its lowest since 1955, in a shock move.

Last month it cut rates from 5% to 4.5% in an emergency move co-ordinated with other central banks.

There had been widespread calls from industry for a major cut as the country begins to face up to the prospect of a deep recession.

It is the most dramatic cut since a two percentage point reduction in 1981.

Didn't see that one coming......

Is it panic or a prudent move?

[redcrx]

probably a typing error on the press release and theyll put it up again next month :)

[Ethel]

It's not pruduent for people like me who depend on interest to live on.
It will have a negative effect on future pensions and investments too, as the investments will be making less money.

[LoftyLottie]

Well, that'll teach me. Fixed my interest rate six months ago for three years! Stamps feet>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

[Lily_b]

All very good, however when are the banks going to put the rate down on my mortgage in relation to the cut rate?

[nedflanders]

I was very surprised at the margin of cut. I thought maybe 0.5 or 0.75% but this is huge!!!! So much for keeping a cap on inflation, if oil rises rapidly again we will have to raise rates as soon as next month.

Lily Lloyds are doing so but the others havent as yet.

[Lily_b]

Ta Ned. Just called my lender, they are 'reviewing the variable rates'. Shame we are not in a good enough position to change lenders at the mo, maybe we can get it capped for a while.

[jno]

Peston sounds unconvinced

http://www.bbc.co.uk/blogs/thereporters/robert peston/2008/11/who_benefits_from_rate_cut.html

[WoWo]

Panic

The economy has gone to hell in a hand cart, pound is now toast, super high inflation and no real benefit to anybody.

[rov1200]

The Labour politicians must be chuckling in their coffee. It's not our fault its those horrible banks. By our policies we may cause 3 million to be unemployed but its not us mate, its all the fault of those banks that won't lend to anyone even though we have given them the dough to dish it out.
Even the projects brought forward are unlikely to start for over a year hence and in the meantime workers laid off will be willing to do any part time job in order to feed their family. Small businesses will go to the wall, workers will take a pay cut, the immigrants will return home and the politicians will still rake in their salaries uttering platitudes.

But it was all the banks fault!

[nedflanders]

rov1200 - How actually did labour policies cause the global credit crunch?

[rov1200]

Nedflanders there are many. But one that stands out was our inability to be good Europeans especially under Blair. Sitting on the fence whilst siding with America especially over Iraq just put a wedge between us and Europe. We failed to join the Euro when we had the chance and now find the � adrift after collapsing against the $. It might be good for exports but that means the British worker has to make many more articles to gain the same standard of living as most of our purchases now come from abroad. Do we really want us to supply cheap labour, I always thought that was for India and China to provide?