The Bank of England is responsible for setting monetary policy that aligns with the inflation target of 2% and is strategically designed to help sustain growth and employment.
The Monetary Policy Committee agreed a package of measures on 3rd August intended to get the inflation target back on track. These were:
- 25 basis point cut in bank rate
- New Term Funding Scheme
- Purchase of up to £10 billion of UK Corporate bonds
- Expansion of the asset purchase scheme for UK government bonds of £60 billion
So, what does the cut in the bank rate mean for you?
If you are one of the 1.5 million mortgage holders that track the base rate, your monthly mortgage payment will reduce, on average by £22.
If you have savings the return on these may reduce but a cut is not necessarily automatic.
The pound fell immediately and whilst it is still higher than it has been of late, you will get a little bit less for your money when purchasing foreign currency than you would have got earlier in the week.
This article is for information only and does not constitute legal advice. We recommend seeking professional advice before taking any action on the information provided. If you would like to discuss your specific circumstances, please feel free to contact us on 08081 891 596.