Press Statement: Bank Of England Base Rate Announcement

Press release published on 6 December 2007 by Scarborough Building Society

Scarborough Building Society Chief Executive John Carrier said: ‘The Bank of England’s decision to reduce its Base Rate to 5.5% is very good news for the UK economy, and the only sensible decision it could realistically have made.

‘It has sent out a very positive signal that our central bank is working to proactively ease the current economic difficulties and return confidence to both consumers and the financial markets.

‘What this means is that we should now see a gradual easing of economic conditions, as the cost of borrowing comes down and access to affordable funds increases for both institutional lenders and individual borrowers.

‘As confidence returns, this should also have a knock-on effect on other economic indicators, such as food and energy prices, which have been constricting households’ affordability.

‘As a business, Scarborough Building Society has continued to see high levels of business and retail savings inflows despite the recent downturn, and growing confidence as people recognise the value of investing with and borrowing from a building society.

‘However, the Base Rate drop will enable us to maintain our commitment to offering people access to the good value money supply they need through our lending activities.’

John added: ‘It should also help get things off to a more positive start in the New Year, as the financial markets try to return to some kind of normality.’

‘I would still encourage consumers to exercise caution with their spending over the Christmas period and next few months, however, as it will take some time for the cost of borrowing to return to normal levels.’

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