MSE News: Bank of England cuts base rate by 0.25%

Former_MSE_Dan

This is the discussion to link on the back of the MSE News Item “Bank of England cuts base rate by 0.25%". Please read the News Item first, as this discussion follows it.

Read Bank of England cuts base rate by 0.25%

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Edinburghlass_2

Just read the new News Link as I thought originally it was a blog from Martin.

I like it and especially the photos of you all, yes I looked back in the archives and found Jenny, Archie and Wendy as well as Dan the Man, its nice to put a face to the posts so thank you.

ps is MSE Natasha still hiding under her desk

Good work all of you

torbrex

I can't get my head around why the rates have come down to ease the burden of those that have overstretched their limits by borrowing too much in the first place. I would have thought that making it easier to borrow money would make the global problem worse. Surely it is in the overall interest of the banks to reduce lending at this time of 'bad debt' and increase insentives for savers to get more money back into the banking system and out of the retail system.

You may have guessed that I am a saver rather than a borrower but I would still like to know why allowing cheaper loans helps the so-called 'credit crunch'.

geo555

The lowering of the base rate will have no effect on the credit crunch. Banks have to borrow money on the "money markets" and because of the global problems, banks CANNOT borrow money at base rate. They are having to pay much higher rates.
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article3558310.ece