Written by Staff Writer
05 Aug, 2016 | 9:19 am
The Bank of England cut official interest rates from 0.5% to 0.25%, a record low and the first cut since 2009.
This means that borrowers with tracker mortgages will see a cut in their costs straight away.
The Bank of England has also signaled that rates could go lower if the economy worsens.
Last month, despite many forecasts from economists that interest rates would be cut, the MPC voted to leave the Bank Rate at 0.5pc by an eight-to-one majority.
The Bank also announced the biggest cut to its growth forecasts since it started making them in 1993.
It has reduced its growth prediction for 2017 from the 2.3% it was expecting in May to 0.8%.
The extensive series of measures was revealed with the central bank predicting that inflation would rise above its 2% target as a result of the falling value of the pound.
Around 1.5 million borrowers have Bank Rate trackers and another 3.5 million have other types of variable-rate mortgage whose rates may move in line with Bank Rate, according to the Council of Mortgage Lenders.
A cut in the Bank Rate to 0.25pc means a borrower with a tracker mortgage should see their monthly payment fall by £24.16 on a 25-year, £200,000 loan on a repayment basis, or £41.66 if it’s interest only.
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