Media Centre
Press release
BSA COMMENTS ON BANK RATE CUT
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Contact: Neil Johnson Date: 8 Oct 2008 |
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Commenting on the announcement today by the Bank of England to cut the Bank Rate by 0.5 percentage points to 4.5%, Adrian Coles, Director-General of the BSA said:
“The BSA welcomes the MPC’s decision to cut the Bank Rate by 0.5 percentage points to 4.5%. The outlook for the economy has deteriorated considerably in recent months, activity in the housing market has stalled, and house prices have fallen.
“This reduction in Bank Rate will provide some support to the housing market because it will help those borrowers on variable rates. However, new fixed rate deals and those linked to money market rates will not necessarily fall because they are determined in the money markets rather than directly by the Bank Rate.
“Although today’s news will clearly help those with repayment difficulties, borrowers who still think they might encounter problems repaying their mortgage should get in touch with their lender as soon as possible. At their building society, borrowers will find a sympathetic response and help in getting their finances sorted.”
On the savings side, Mr. Coles said:-
“Building societies have attracted record levels of savings since the disruptions in financial markets last year. In the twelve months to the end of August this year, building societies attracted £18.5billion in net savings, compared to £9.7 billion in the same period a year earlier.
“These figures reflect the current heightened economic uncertainty and the recent volatility of stock prices, but also building societies' competitive rates of interest and reputation for safety and trust. Despite this cut in Bank Rate, these factors will continue to draw savings into building societies in coming months.”
BSA has also welcomed the financial support package announced earlier today – further details can be found at:-
http://www.bsa.org.uk/mediacentre/press/govn_support.htm
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CONTACT: Neil Johnson
DIRECT LINE: 020 7520 5903
EMAIL: neil.johnson@bsa.org.uk
NIGHT/WEEKEND: 07908 764549
The Building Societies Association (BSA) represents all 59 building societies in the United Kingdom. Building societies have total assets of over £360 billion and, together with their subsidiaries, hold residential mortgages of £250 billion, more than 20% of the total outstanding in the UK. Societies hold about £235 billion of retail deposits, accounting for more than 20% of all such deposits in the UK. Building societies also account for about 37% of all cash ISA balances. Building societies employ over 51,500 full and part-time staff and operate through more than 2,000 branches.
Photographs of Adrian Coles are available from the BSA press office, or from the Association’s website at www.bsa.org.uk or Headlinemoney www.headlinemoney.co.uk
