14 April 2008
The cut to the base rate of interest will probably not have that much of an impact on the amount of credit available on the market, it has been claimed.
UK Economist at Capital Economics Vicky Redwood stated that service providers failed to pass on other rate cuts to consumers, who may have personal loans.
Eventually though, she added, if the Bank of England decides to make further changes to the base rate in the months ahead "sharply", then the changes will be reflected in providers' own products.
She asserted: "It is just that in the short term that might not feed through into the rates we actually pay. Things are likely to get a little worse before they get a little better."
But it is likely, Ms Redwood observed, that the recent cut to 5% will not be considered by the majority of banks and similar institutions.
In a Credit Conditions Survey from the Bank of England, lenders claimed that there will be a lowering of the number of secured credit deals available in the coming three months.
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