Falling rates encourage borrowing and spending

Posted 2007-10-31

The Bank of England’s Governor asserted that the UK has had “unusually low” interest rates in recent years. 

Meanwhile in Belfast, Mervyn King offered during a speech to the Ireland Chamber of Commerce and Industry that a continuous trend in saving money around the world has created favourable conditions for Brits seeking to borrow.

Both short and long term rates for secured loans have been at historic lows, further encouraging financial lending. Mr. King also offered, “One of the most remarkable changes in the world economy over the past decade has been the fall in interest rates. Those rates of interest have, in the developed world, encouraged borrowing and spending.”

However, Mr. King’s optimism came with a warning that in the coming years, credit such as secured loans “will not be so readily or cheaply available.”

Many Britons may be enticed to secure a loan now, before market conditions tighten – and rates increase. Above all, it is important for individuals considering a loan to keep a sharp eye out on market movements, trends and current rates, in order to make their applications at the best possible time.

During last October’s meeting, the Bank of England’s monetary policy committee chose to keep the current base rate of interest at 5.75%, the third rate set since a 0.25% increase was instigated last July.

Leave a Reply