Bank 'made right decision' - buy to let mortgages

09 February 2009

The Bank of England made the right decision last week when it opted to reduce the base rate further, it has been stated.

David Kern, an economic advisor for the British Chambers of Commerce, said that interest rates are now "near the bottom" and predicted that the Bank's monetary policy committee may turn to other methods to aid the economy.

Since October - when the base rate began falling - lenders have moved more rapidly to reduce mortgage rates, he noted.

This could help to lower the cost of buy to let mortgages as well as other financial products.

"By and large the banks have been rather slow before October. Since October I think they have moved quite forcefully," Mr Kern commented.

He went on to say that the base rate will become less important due to its low level, remarking: "Once you are at one per cent then it becomes less critical."

Meanwhile, Nationwide has claimed that the interest rate cuts have had an impact on people's desire to save.