6 August 2008
A reduction in the Bank of England base rate is needed in order to stimulate consumer confidence, according to the National Association of Estate Agents (NAEA). The organisation claims a rate cut would help to revitalise the credit market by prompting lenders to reduce their own borrowing rates. This would provide some relief to consumers with secured loans or those who are looking to take them out, it is suggested. Peter Bolton King, the Chief Executive of the NAEA, said that a lower base rate would act as a "catalyst" for lower borrowing rates across the market. Passing them on to consumers would allow the "shackles" on the credit market to be "loosened" somewhat and give lenders "room to breathe", he added. The Bank of England's monetary policy committee will make its monthly decision on the base rate tomorrow. The rate currently stands at 5% following a 0.25% cut in April.
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