Majority disagree with IMF’s proposed bank rate cut

International Monetary Fund

60% of people surveyed by MoneySupermarket.com are against a cut to the base rate.

This follows the suggestion by the International Monetary Fund (IMF) that the Bank of England should consider cutting the base rate further.

When asked about the impact a cut could have on their finances, 45% say it would impact their savings with rates already at a very low level following a stagnant 0.5% base rate over the last three years. In addition, 15% of respondents are against a cut because inflation still needs to be controlled.

However, 35% say cutting the base rate would be a good move; 15% of those polled hope it would result in a decrease to their mortgage payments, and 19% support a cut to base rate believing it will help stimulate growth in the UK.

Kevin Mountford, head of Banking at MoneySupermarket.com, said: “It’s no surprise savers have come out fighting against the proposed rate cut as they have suffered from low rates since base rate fell to a record low in March 2009, especially those who relied on the savings interest to provide a regular income.

“The majority of borrowers on the other hand have benefitted from the low interest rate environment which has resulted in many people having lower monthly mortgage payments. A base rate cut would not be good for banks as it could make it more difficult for them to be flexible on pricing, and as we have seen more recently on mortgages, it could give them the perfect opportunity to decouple rates from Bank of England base rate altogether.”

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