BSA comments on Bank rate cut

Building Societies Association logo for press releases

Thursday, 10, Apr 2008 12:00

Commenting on the announcement today by the Bank of England to cut the Bank Rate by 0.25 percentage points to 5.00%, Adrian Coles, Director-General of the BSA said

“Today’s rate cut shows that the Monetary Policy Committee recognises the potential risks to economic growth and the housing market. With activity in the housing market cooling, this rate cut should make it easier for borrowers to meet their mortgage costs.

“The cut will be particularly welcomed by those taking out a new mortgage and those coming off a fixed rate product. However, the MPC’s rate decision may not be reflected by changes to the money market rates. Therefore the quarter point reduction will not necessarily be reflected in the fixed rates on offer straight away.

“In the current uncertain economic climate, it is important that homeowners ensure that they will be able to maintain mortgage repayments and that they contact their lender as soon as possible if they foresee any repayment problems”.

On the savings side, Mr Coles said:

“Building societies have received record saving deposits in recent months, and savers are likely to continue to be attracted by the competitive rates offered by building societies as well as the lower risk to their savings compared to investing in shares.”

~ Ends ~

1. The Building Societies Association (BSA) represents all 59 building societies in the United Kingdom. Building societies have total assets of just under £350 billion and, together with their subsidiaries, hold residential mortgages of £245 billion, more than 20% of the total outstanding in the UK. Societies hold about £215 billion of retail deposits, accounting for more than 20% of all such deposits in the UK. Building societies also account for over 38% of all cash ISA balances. Building societies employ over 50,000 full and part-time staff and operate through more than 2,100 branches.

2. Photographs of Adrian Coles are available from the BSA press office, from the Association’s website at www.bsa.org.uk or from Headlinemoney www.headlinemoney.co.uk

3. The BSA has produced a consumer fact sheet, What should I do if I am having difficulty paying my mortgage, can be viewed on the BSA website here http://www.bsa.org.uk/consumer/factsheets/arrearsfactsheet.htm

Neil Johnson

PR & Policy Manager

Building Societies Association

Tel : 020-7440 2260

E-Mail : neil.johnson@bsa.org.uk

The BSA's telephone numbers changed on 25th February 2008. My new number is now 020-7520 5903. The fax number is unchanged.

Don't forget the BSA's Annual Conference in Manchester on 7/8 May 2008. More information is at www.bsaconference.org