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Base rate down to 2%

The Bank of England’s Monetary Policy Committee has cut the base rate by 1%, taking it down to a 57year low of 2%.

The cut was heavily predicted and follows a 1.5% reduction from November.

Lloyds TSB have already pledged to pass on today’s base rate reduction in full, to existing customers with variable and tracker rate loans.

While other mortgage lenders may still be considering their positions, it would appear that at least two providers of unsecured loans, which are commonly used to consolidate debt, have pre-empted the MPC’s decision by increasing rates hours before the announcement was made.

According to MoneyExpert.com, Lombard Direct raised the rate on one of its most competitive loans from 7.8% to 8.3% (for an unsecured loan of £7,500), while AA Loans hiked one rate from 8.5% to 9.4%, for a similar sum.

According to the price comparison website’s director, Sean Gardner, the Government is failing to take note of the fact that the unsecured loan industry has continued to increase costs, despite record cuts in the base rate.