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Huge interest rate cut welcomed Banks urged to pass on rates cut
(about 1 hour later)
The Bank of England's decision to cut interest rates in the UK to 3%, has been welcomed in Northern Ireland. Northern Ireland's banks must pass on a 1.5% interest rates cut immediately, the Consumer Council has said.
Interest rates are at their lowest since 1955, and the 1.5% cut is the biggest since 1981. The Bank of England's decision to cut interest rates to 3%, means they are at their lowest since 1955.
The First Trust Bank said it will cut its base rate to 3% from close of business, while the Ulster Bank said the rate move was still under review. The First Trust Bank said it will cut its base rate to 3% from close of business, while the Ulster Bank said it was reviewing the rates move.
Alison Donnelly from the Consumer Council said consumers were "in desperate need of a break".
"With only seven weeks until Christmas it couldn't have come at a better time," she said.
"If this 1.5% cut is passed on, a household with a £100,000 mortgage could save as much as £125 per month depending on what type of mortgage they have.
"This is a significant saving that could make a huge difference to consumers who are just about keeping their heads above water."
She said people were paying £33 more per week for essentials such as food, fuel, heating and mortgage compared to this time last year and that house repossessions "went up by 59 per cent between April and June".
The Northern Ireland Chamber of Commerce said the move was good news for business.The Northern Ireland Chamber of Commerce said the move was good news for business.
According to price comparison website Uswitch.com, a customer with a 25-year £150,000 mortgage on an average two-year tracker rate of 6.27% will see their monthly repayments fall by £134 to £856.
The NI Independent Retail Trade Association said it was more than could have been hoped for.The NI Independent Retail Trade Association said it was more than could have been hoped for.
Glyn Roberts, of NIIRTA said: "We hope that this will kick start the economy and also reduce the mortgage burden on consumers.Glyn Roberts, of NIIRTA said: "We hope that this will kick start the economy and also reduce the mortgage burden on consumers.
"Both the Ulster Bank and PwC have produced reports this week stating that our retail sector in Northern Ireland will be hard hit with this economic downturn and we hope that this 1.5% reduction will go some way to restoring consumer confidence.""Both the Ulster Bank and PwC have produced reports this week stating that our retail sector in Northern Ireland will be hard hit with this economic downturn and we hope that this 1.5% reduction will go some way to restoring consumer confidence."
NI Chamber of Commerce president Bro McFerran said: "If you think about exports for example, it should make our exports cheaper, so it should stimulate business there.NI Chamber of Commerce president Bro McFerran said: "If you think about exports for example, it should make our exports cheaper, so it should stimulate business there.
"I think we're likely to see sterling falling against other currencies which should make us more competitive.""I think we're likely to see sterling falling against other currencies which should make us more competitive."
PricewaterhouseCoopers said it would "ease the squeeze on Northern Ireland households and boost flagging business confidence".PricewaterhouseCoopers said it would "ease the squeeze on Northern Ireland households and boost flagging business confidence".
"This will be particularly welcome for Northern Ireland's poorest households who are experiencing inflation at over 7% - a rise of around 1% over the past six weeks alone," PwC Northern Ireland chief economist, Philip McDonagh said."This will be particularly welcome for Northern Ireland's poorest households who are experiencing inflation at over 7% - a rise of around 1% over the past six weeks alone," PwC Northern Ireland chief economist, Philip McDonagh said.
"It now falls to the banks and lending institutions to take immediate action and pass this entire rate cut on to commercial and domestic borrowers and first-time housebuyers.""It now falls to the banks and lending institutions to take immediate action and pass this entire rate cut on to commercial and domestic borrowers and first-time housebuyers."