Economy 'should recover' after rate cut - buy to let mortgages

11 November 2008

The economy will be helped to recover by the Bank of England's interest rate cut, it has been claimed.

Vicky Redwood from Capital Economics stated that last week's base rate cut will increase confidence within financial markets, adding that rates are "probably going to fall a lot further".

"We think rates could fall to at least one per cent, we certainly wouldn't rule out them falling below that," she commented.

Such a drop in interest rates could lower the cost of buy to let mortgages.

However, Ms Redwood warned that confidence would only increase if "policy makers are willing to pull out all the stops" to aid the economy.

The Bank of England's monetary policy committee (MPC) met on November 6th and voted to slash the base rate to three per cent.

This "significant" reduction was required to help the MPC meet its inflation targets, the committee revealed.