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9
Dec
Interest Rate Going Down
The Bank of England is expected to cut interest rates later to
their lowest for more than half a century; many commentators were
surprised last month when the bank announced a dramatic cut in the
bank rate from 4.5% to 3%.
Business leaders and economists have called for rates to be
slashed to 2% to prevent the downturn deepening. Bank rates have
never fallen below 2% from the foundation of the bank in 1694.
The bank is prepared to act decisively, with the economy slowing
sharply. Governor Mervyn King told a parliamentary committee last
week, "We will take whatever action we feel necessary on interest
rates to steer the economy back into calmer waters.
An average property in the Uk is now valued at £163.605,
found the Halifax, a level last seen in July of 2005.The annual
rate of decline is compared by the mortgage lender by comparing the
average house price over the past three months with the average for
the same three-month period the year before.
Moneyfacts, the financial information service estimates that
homeowners could see a saving of between £19 and £75 a
month - depending on the size of the rate cuts and whether lenders
pass on the cuts in full.
However, any further cut in rates is unlikely to be welcomed by
savers who often depend on interest payments from their savings, as
banks are also likely to cut the interest they pay on these
accounts.
The Halifax will be publishing its formal house price prediction
for 2009 later this month.
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