Independent Financial Life Planners Bishop's Stortford: Interest rates look likely to be cut again

Wednesday, 13 July 2016

Interest rates look likely to be cut again

To try and counter the post-Brexit effect on the economy it is looking very likely that the Bank of England will cut interest rates to a new historic low earlier than expected. Bank of England governor Mark Carney had already suggested to policymakers on the Monetary Policy Committee (MPC) that an exit vote would slash rates over the summer. Economists at Hargreaves Lansdown said it was "now probable" rates will be cut on Thursday, with financial markets pricing in a reduction from 0.5% to 0.25%.

They said it might even be possible that rates may drop to zero in August as the Bank struggles to bolster flagging growth and contain the fallout of Britain's vote to leave the EU. Once again good news for borrowers, but not good news for the long-suffering UK savers.

Mr Carney also said on unveiling the Bank's Financial Stability Report that Brexit risks to the economy had started to "crystallise". Mr Carney has been quick to stress he is personally reluctant to reduce rates lower than 0.25% or into negative territory in a recent speech he said : "As we have seen elsewhere, if interest rates are too low or negative, the hit to bank profitability could perversely reduce credit availability or even increase its overall price."

The Bank has unveiled a series of measures to help limit the Brexit blow, relaxing banking rules to boost their lending firepower by up to £150 billion and pledging to pump in at least £250 billion if needed to calm markets in the immediate aftermath of the Brexit decision. Enables IFA’s in Bishops Stortford are here to help you plan financially as a saver or a borrower.

Issued by: Enable Independent Financial Life Planners •  25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 - Fax: 01279 657339 Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority. It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us. NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

Source: The Independent

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IFA Bishop's Stortford

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