With inflationary pressures having all but disappeared the time has come for interest rate cuts, and anything less than a 1% cut tomorrow will just be pussyfooting around the issue.
Historically interest rates have been cut when economic pain is being felt rather than before, and this time round it was only David Blanchflower, an economist, of the MPC members, who was calling for rate cuts before this particular pain started.
On this issue Jonathan Turpin, Chief Executive of Moveme.com, comments “Last month’s cut in rates was welcomed by the industry but the MPC needs to maintain this momentum with a further cut of at least half a percent this week. However, it’s the lenders who are proving the real barrier at this present moment. For consumers to benefit, these cuts must be passed down to the nation’s homebuyers.
“The time has come for lenders to start lending again - we need to see the return of a range of competitive mortgage products if we are to stand any chance of kick starting activity within the housing market.”
Well forget half a point, lets make it at least a full point. In that way not only will it hopefully make borrowing cheaper it will also make saving less attractive, which in turn will hopefully give the economy a boost too.
