17 August 2005
Loans customers glad to see a cut in interest rates have been fortunate, it emerged today.
Minutes from last month's meeting of the Monetary Policy Committee (MPC) at the Bank of England (BoE) show that the MPC was finely split over the decision to cut the baseline rate of interest.
The statement said that while five members wanted to reduce the rate by 25 basis points from 4.75 per cent to 4.5 per cent, as many as four others, including the governor of the BoE, Mervyn King, voted to keep the rate unchanged.
The argument hinged on the fiscal response most likely to encourage economic growth.
For those in favour of a cut it seemed that high levels of household debt and the lagged impact of past interest rate increases had slowed spending and that a cut was a necessary remedy.
Those against argued that "while the growth in aggregate output had slowed, and the labour market had eased a little, the economy was still operating close to full capacity".
Loans customers can be glad that rates have changed, and that now is a great time to get a loan.
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