ROOF Blog

The Organisation for Economic Cooperation and Development (OECD) warned the Bank of England (BoE) needed to press ahead with interest rate cuts, as the treasury is running out of options to produce further tax or spending boosts to help the ailing British economy. Britain has been identified as being among several economies that look particularly vulnerable along with Hungary, Iceland Spain and Turkey. The OECD urged the BoE to continue its policy to cut rates as the ‘negative wealth effects on household consumption from falling house prices and financial wealth may be greater than assumed’.

Although Bank of England interest rates have been slashed to 3 per cent, many mortgage lenders still haven’t passed the cut on to borrowers, some of whom are paying 7 per cent or more. The ‘list of shame’ by the Guardian, lists Kent Reliance Building Society as topping the standard variable rate with a rate of 7.59 per cent, although it says this figure will drop next month, as do other lenders with rate in excess of 7 per cent. A spokesperson from the Building Societies Association defended some of its members saying there are a whole range of issues that impact on how a mortgage is priced, not just the Bank of England base rate.