Bank Base Rate 3% - 06.11.2008

Author: Mike Freeman Posted on: 06 November 2008

The Bank of England have made the surprise announcement of a 1.5% reduction in BBR, which now stands at 3%, the lowest rate since 1955.

Whilst a welcome decision, it underlines the severity of the downturn in the global economies, which is being compounded almost on a daily basis with companies returning poor results and gloomy economic outlook.

The last rate reduction in October sadly did not result in the lenders passing on the full reduction to borrowers. It has also taken a full month for the banks to reduce LIBOR by 0.6%.  As at 5 November, LIBOR stood at 5.68%, a full 2.68% above BBR. The reaction of the banks and lenders to this latest reduction and its affect on buy to let rates will be eagerly watched in the coming days.