Posted on: Tuesday, August 2, 2016
Lenders react to possible base rate cut
All eyes were on the Bank of England this week, following widespread speculation of an impending cut in the Base Rate - the first since March 2009.
The Monetary Policy Committee has however voted 8-1 to leave rates unchanged, opting to wait until August’s inflation report before taking any action.
A number of lenders, including Halifax and Santander, have already withdrawn or increased their tracker rates over the last few days. In some cases the increases have been nearly 0.50%.
This certainly suggests that lenders believe the Bank of England is preparing to cut Base Rate very soon, and are looking to protect their margins.
A drop in base rate will of course benefit homeowners who already have tracker mortgages, and would immediately see a drop in their monthly payments.
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