Thursday, December 4, 2008
Interest rates cut by one third – but will that help?
The bottom line is that despite the dramatic nature of these cuts, the actual impact they'll have won't be that great. Sure, some mortgage borrowers will find their monthly payments coming down. But for new lending, most of the government's public pressure on the banks is just showboating. Banks will carry on the way that they always have. Lower base rates aren't going to increase the amount of credit available.