Interest Rates down to 5.5%

There were huge sighs of relief all over the UK this morning as the Bank of England announced that they were cutting the base interest rate back down to 5.5%. This was after the base rate was raised to 5.75% earlier this year, the highest it has been in 6 years.

The reduction of the interest rates will hopefully be enough to hold off an economic downward turn over the coming months. Worrying downturns in the housing market and problems within the bank and building society funding sector, have got many homeowners and businesses worried about the future.

This drop in rates will hopefully ease the pressure slightly, especially during the stressful pre-christmas season, and will raise peoples confidence to continue as normally as possible.

As the cost of mortgage repayments and bills covers at least 50% of most peoples take home pay, they are finding it harder and harder to continue the spending habits they have grown used to over the past few years and so the consumer service sector has been noticing a drop in spending. The entertainment and leisure sector such as cinemas, gyms, hotels and restaurants, have all noticed a slump in the past month or two.

It has probably been a long time coming. In a society that advocates 'buy now, pay later' and dishing out credit cards and loans a bit too easily, surely we have reached the point where we need to change our ways?