Oh Yes, most certainly… at least that is the verdict of Bank of England’s governor, Mervyn King.
And who knows better than, well the man who is going to have a major say in all this after all?
Speaking to Commons Treasury select committee yesterday, he said that he wants banks to start lending normally rather than sitting on – what is essentially tax payers’ money (as this money was used to bail out the banks).
Governor was aware that although the Bank of England had cut its base rate from 4.5% to 3% in November, most banks had refused to pass on this cut fully to their customers. Many even withdrew their tracker mortgages – and they are now reintroducing them, but with a higher spread from the base rate than before.
"This means that we must cut bank rates by more than we would otherwise have done, and we will take this into account when we calibrate the correct cut in bank rate."
There you have it – crystal clear, straight form Mr King. Governor is not hoping, but telling us that the rates are on their way down. Expect some news… even as early as December.
Will this stop repossession incidents in this country? I certainly think this will help. Those who were fearing coming off the (lower) fixed mortgage payments to much higher APR rates, and dreading that eventuality, are now probably looking forward to that. With base rates so low, their APR will almost certainly be lower, or at par, with the fixed rates they have at the moment. Even credit crunch has a silver lining for the UK borrowers.
Prepare for the Christmas, honey!
Ho.. Ho.. Ho..
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