Martin Lewis: How savers could beat ‘cusp’ as interest rates cut amid coronavirus outbreak
The Bank of England announced a cut to the base rate yesterday, reducing it by 50 basis points from 0.75 to 0.25. The move, causing a huge blow to savers, came as a temporary measure amid the coronavirus outbreak, which is affecting countries worldwide including the UK. Following the announcement, Martin Lewis has explained what it could mean for both borrowers and savers.
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Speaking on Good Morning Britain today, he said: “On interest rates, mortgages – variable and tracker rates, they’re going to get cheaper by about £30 a month. That’ll factor in.
“If you’re looking to remortgage, a couple of weeks would be a very good time.”
However, Mr Lewis explained that savers could suffer following the move.
“Savers, it’s an absolute blooming nightmare for,” he warned.
“If you’ve got savings now, when they launch fixed rate savings, where you can lock your money in for a year, they launch them in tranches.
“What that means, is something like they say let’s get £10million in and then we’ll launch a new one.
“Well there’s a couple of the ones from yesterday still around that have decent rates that haven’t sold out their £10million yet. If you can lock your money in one of those now before the rates drop, you might just beat the cusp of this.”
Mr Lewis also spoke about the Bank of England decision on This Morning today.
He said: “UK interest rates are now 0.25 percent. That’s the lowest we’ve ever had in more than 200 years.”
Yesterday, the Bank’s Monetary Policy Committee said: “Although the magnitude of the economic shock from Covid-19 is highly uncertain, activity is likely to weaken materially in the United Kingdom over the coming months.
“Temporary, but significant, disruptions to supply chains and weaker activity could challenge cash flows and increase demand for short-term credit from households and for working capital from companies.
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“Such issues are likely to be most acute for smaller businesses. This economic shock will affect both demand and supply in the economy.”
As of 9am on March 11, 2020, 456 people have tested positive for cornavirus in the UK.
Of these, six patients who tested positive for COVID-19 have died, Public Health England confirmed.
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