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Banks move to match interest cut Banks move to match interest cut
(about 1 hour later)
Two of Northern Ireland's 'big four' banks have said they will be matching the latest cut in interest rates. Three of Northern Ireland's 'big four' banks have said they will be matching the latest cut in interest rates.
The Ulster Bank said all their tracker customers would benefit from the cut, but they are meeting to discuss other financial products. The Ulster Bank said all its tracker customers would benefit from the cut, but it is meeting to discuss other financial products.
The Bank of Ireland has said their standard variable rate would fall from 5.49% to 4.49%. The Bank of Ireland said its standard variable rate would fall from 5.49% to 4.49%.
The First Trust Bank said its base rate would change to 2% in line with the Bank of England's 1% interest rate cut.
Interest rates are to drop by one percentage point, from 3% to 2% - the lowest level since 1951.Interest rates are to drop by one percentage point, from 3% to 2% - the lowest level since 1951.
The decision by the Bank of England to cut interest rates again has been welcomed in Northern Ireland. The decision by the Bank of England to reduce interest rates again has been welcomed in Northern Ireland.
PricewaterhouseCoopers' Philip McDonagh said while the cut was welcome, the economic outlook remained grim.PricewaterhouseCoopers' Philip McDonagh said while the cut was welcome, the economic outlook remained grim.
He said: "We had hoped to see a cut of 1.5 percentage points, but today's 1% cut still sends a positive message to beleaguered businesses and homeowners."He said: "We had hoped to see a cut of 1.5 percentage points, but today's 1% cut still sends a positive message to beleaguered businesses and homeowners."
Ann McGregor, of the NI Chamber of Commerce, said: "It has come at the right time to help the slowing economy and is justified given that the UK economy is now in grave danger of suffering a prolonged recession.Ann McGregor, of the NI Chamber of Commerce, said: "It has come at the right time to help the slowing economy and is justified given that the UK economy is now in grave danger of suffering a prolonged recession.
"It is also crucial that the banks now pass on the reduction to local businesses and other customers so that they can see the benefits.""It is also crucial that the banks now pass on the reduction to local businesses and other customers so that they can see the benefits."
Glyn Roberts of the NI Independent Retail Trade Association said: "This is the only sensible decision that the Monetary Policy Committee could have taken to help stimulate demand and to encourage consumer spending.Glyn Roberts of the NI Independent Retail Trade Association said: "This is the only sensible decision that the Monetary Policy Committee could have taken to help stimulate demand and to encourage consumer spending.
"We remain to be convinced that the recent reductions in VAT will have a real impact on consumer spending and so this rate cut is absolutely crucial.""We remain to be convinced that the recent reductions in VAT will have a real impact on consumer spending and so this rate cut is absolutely crucial."
Andrew Irvine, from Belfast City Centre Management, said: "I think the Bank of England's certainly doing its bit though I would have a question mark over the local banks, I think some of this wealth is not being shared out.Andrew Irvine, from Belfast City Centre Management, said: "I think the Bank of England's certainly doing its bit though I would have a question mark over the local banks, I think some of this wealth is not being shared out.
"If this is passed on and people see money coming off their monthly mortgage payment then I'm sure that will be a real boost in the lead-up to Christmas.""If this is passed on and people see money coming off their monthly mortgage payment then I'm sure that will be a real boost in the lead-up to Christmas."
Ben Collins, of the Royal Institute of Chartered Surveyors NI, said he expected further cuts next year.Ben Collins, of the Royal Institute of Chartered Surveyors NI, said he expected further cuts next year.
"Households and business will take some comfort from today's bold move by the BoE, which is a much needed response to the dramatically worsening conditions across the whole economy."Households and business will take some comfort from today's bold move by the BoE, which is a much needed response to the dramatically worsening conditions across the whole economy.
"However in our opinion it will not on its own be sufficient to bolster confidence given the scale of the current financial crisis," he said."However in our opinion it will not on its own be sufficient to bolster confidence given the scale of the current financial crisis," he said.
The Ulster Bank is also expecting further cuts.The Ulster Bank is also expecting further cuts.
"We have probably seen the last of the big interest rate cuts and we expect a further, more modest, 50 base point cut to 1.5% in January 2009," the bank's Richard Ramsey said."We have probably seen the last of the big interest rate cuts and we expect a further, more modest, 50 base point cut to 1.5% in January 2009," the bank's Richard Ramsey said.