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Bank of England cut interest rates to boost mortgage market

06/03/2009


The bank of England has yet again cut interest rates to an all time low of 0.5%. This is the sixth time in five months that interest rates have been cut.

Governor of the Bank of England, Mervyn King, said that “the plan to revive the economy and the housing market would work”. He commented further by saying “Nothing in life is ever certain, but these measures we think will work in the long-term”.

He also said “I don’t know how long it will take; much depends on the situation in the rest of the world. But if countries work together, these measures will I believe eventually work.”

The Chancellor of the Exchequer, Alistair Darling stated that increased supply of money is important for the UK economy to recover. He also mentioned that the cut in interest rates will not be good news for savers but the important factor was that UK recovers from the recession.

More mortgage products will become available due to the ‘quantitative easing’ policy which help banks to lend more money to house buyers which entail cheaper rates of interest.

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