Rate Cut Yet To Bring In Desired Results

Nov. 11, 2008 - PRLog -- London (Shakespeare Finance): The abnormal reduction in the rates by a huge margin of 1.5 percent to 3 percent has certainly took every one by surprise. After all, this diminution sent the current reading of rates to a nadir of last 54 years.


Although, in the wake of liquidity crisis, for a recuperating economy, it may bring the immediate relief. However, the probability of possible side-effects can also not be ruled out. Since, the cut was enforced to check and curtail the growing inflation and other negative vibes hampering the overall growth of UK economy. If eminent economic wizards are to be believed, the gigantic reduction in rate has been just like the way, as if the person has all the weapons but as soon as he lands up in the battlefield, he resorts to his primary weapon. Although this could fetch immediate results but in long run, it can go against you.


However, talking in the present context, this reduction will certainly put an enormous amount of pressure on the lenders syndicate, forcing them to pass on the benefits to the borrowers section. Thus, even SVRs (Standard Variable Rate) is also expected to undergo a slight slashing. However, people who are expecting a cheaper remortgage, will not be smiling, since the top banking names are already well set to launch their expensive loan products for the upcoming season of demands.


As far as the lenders offering cheap services are concerned, they need to refrain from entertaining bulk of loan requests and strengthen their criteria for applying for loans. Merely following the market trend will only mess up the situation. Although, the reduction in rates has opened the gates for prospective slashing on interest rates, but it will take some time to come into full effect. While if you are thinking about a loan, then make sure that you have sufficient cash in your pocket to deposit.


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