The Bank of England's monetary policy committee (MPC) yesterday took the decision to reduce interest rates.
As a consequence of the move, interest rates have now been clipped from their previous level of 5.75 per cent, to a lower rate of 5.5 per cent. Mortgage holders may be more relieved as, according to moneyfacts.co.uk, the move will lead to those with a mortgage of £100,000 making a saving of between £15 and £20 every month.
"A reduction in interest rates is exactly what the market needs and will benefit consumers," said Michael Coogan, director general of the Council of Mortgage Lenders (CML). "This will reduce the risk of payment shock for the 1.4 million borrowers coming off fixed-rates in the next year," he added.
Sharing the sentiment expressed by the CML, the Fair Investment Company described the move as "an early Christmas present". In related news, the European Central Bank has this week decided to keep interest rates at their current level of four per cent.