Interest rates cut to 3%

[Shirley]

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.

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Damn... we won't see the benefit of this at a time when we most need to - we're tied into a northern rock mortgage for a few more years.

[Annpan]

banks are reluctant to pass it on anyway... not sure if any of us will see the benefits.

[Trace45]

I know how you feel, Nationwide tracker here with 'minimum rate' applied.

Great news for those it helps who are struggling.

Feel sorry for pensioners with savings and those retiring now though.

Lets see how many big city bonuses are paid out...

[red]

personally I find such a big cut a lot worrying.

[snapdragon]

...................................Feel sorry for pensioners with savings and those retiring now though.

I was 'early retired' (aka made redundant with a small pension) last Friday
it's a bit scary

[JulieSherris]

In Ireland, the banks all passed the cuts on straight away a few weeks ago - which is good news for us, as we have only just paid our first mortgage payment!

Hubby tried to explain it to me & it's because Ireland follows the european banking codes... where the UK doesn't apparently - I wasn't exactly listening (when do I? )
Although there's a recession over here too, I'm hoping that everyone back home is ok now & will be ok when it passes - I still have awful memories of the early 1970's, the 3 day week, the power cuts etc - my stepdad was an FOC in the print at the time & two thirds of his wages went to the strikers funds...... oh, we had enough, but I can't imagine for one moment the kids of today living like we did back then!!

Good luck everyone - and if it drags out until next spring/summer, then I'll issue an open invite for anyone wanting a cheap getaway for a few days - bring yourselves, a few supplies to help my cupboards & have a few days peace in the irish countryside!!

Julie.

[Millymollymandy]

I mourn the days when I used to get 10% interest on my building society account. These days you get rubbish interest whether the economy is doing well or is in recession.

[MikeM]

personally I find such a big cut a lot worrying.

you're not alone. I've read a number of articles where some people think we may be entering a serious slump rather than just a recession.
Could be tough times ahead.

[invisiblepiper]

I agree - my OH works in industry and has a better key on things from that perspective. There are serious signs of a major downturn - seeping redundancy - where companies are 'losing' workers a few per week - no orders - suppliers refusing credit and that sort of thing. Also - in a very tourist area - hotels are quiet, big weddings are being cancelled and the charity shops are low on stock as folk are selling better stuff themselves rather than donating.
However, I hope we see a better type of human behaviour as a result - a bit less greed perhaps?

[MikeM]

aye, I'm hoping that it'll be a bit of (hopefully very) short term misery which will lead to a much less greedy and self obsessed society.
Hmm, I think the medication may be wearing off

[Odsox]

I mourn the days when I used to get 10% interest on my building society account. These days you get rubbish interest whether the economy is doing well or is in recession.

I certainly don't mourn the opposite where I (briefly) had to pay a whopping 17% on my mortgage interest back in the late 70's. It stayed around 16% for ages I seem to remember.
Now with no mortgage at all thank goodness.

[Annpan]

Well perhaps that is something to be said for house prices... we now pay 5% interest on a mortgage but more for the house, you used to pay 17% on the mortgage but less for the house - it still does't balance out obviously but it beats giving so much money to the banks....maybe .... or have I had too much caffeine this morning?

[Millymollymandy]

I mourn the days when I used to get 10% interest on my building society account. These days you get rubbish interest whether the economy is doing well or is in recession.

I certainly don't mourn the opposite where I (briefly) had to pay a whopping 17% on my mortgage interest back in the late 70's. It stayed around 16% for ages I seem to remember.
Now with no mortgage at all thank goodness.

I don't have a mortgage or any debts but what I don't understand is why people don't get fixed rate mortgages? The only time I ever had a mortgage (a French one) it was fixed rate so we knew exactly how much we had to pay each month, which would not change for the 15 year length of the mortgage. It puzzles me why anyone would chose a mortgage where it fluctuated - or don't such things exist in the UK?

[Annpan]

Fixed rate here only last 3 years or so... so you kind of take a gamble that intrest rates will not increase exponentially by the time your fixed rate ends.... or you are hoping intrest rates go up then drop suddenly before you need to re-negotiate your mortgage.

It also quite common practice these days to move your mortgage every few years.

[Millymollymandy]

Oh blimey! Glad I have never had a mortgage in the UK then!