Released on: November 21, 2008, 10:00 am

Press Release Author: Gregory Pennington

Industry: Financial

Press Release Summary: Following the first rise in consumer confidence since December 2007, debt management company Gregory Pennington have said that while this may bode well for the health of the economy in some respects, it is by no means a sure sign of economic recovery, and consumers should not be complacent about their finances in the coming months.

Press Release Body: Following the announcement from Nationwide Building Society that consumer confidence has improved for the first time since December 2007, debt management company Gregory Pennington commented that this is an encouraging sign that the Government’s recent actions aimed towards economic recovery may be working, but warned consumers that difficult times may still lie ahead – and those facing financial worries, particularly debt problems, should tackle those issues as soon as possible.

Nationwide’s overall Consumer Confidence Index (CCI) rose 8% in the month, bringing the index up from 51 in September to 55 in October. Most significantly, this is the first rise since December last year – a sign that some form of economic recovery could be on the horizon, possibly as a result of the recent Government bank bailout scheme.

The number of people who thought the economy would be performing better in six months time almost doubled from 14% in September to 27% in October.

However, Nationwide’s figures showed slightly less optimistic opinions amongst consumers regarding the current state of the economy: three quarters (75%) of those questioned believed the current economic situation is bad, compared with two thirds (66%) in September.

A spokesperson for debt management company Gregory Pennington said that increased consumer confidence for the future is encouraging, but added that consumer confidence should not be confused with expert’s predictions.

“The Consumer Confidence Index is to do with how people feel,” she said. “It’s likely that consumer confidence has improved on the back of the recent Government bank bailout scheme, as well as cuts in the base rate. But that doesn’t necessarily mean we are much more likely to avoid any of the issues highlighted by economists in recent months.

“On the one hand, consumer confidence is very important for the economy and could be pivotal in terms of how soon and how quickly the economy recovers. When consumer confidence is high, people are more willing to spend their money and less inclined to save, therefore pumping more cash into the economy and maintaining a healthy cycle. Conversely, when consumer confidence is low, less money flows through the economy – and that puts the economy at risk of recession.

“The Consumer Confidence Index is a reasonable indicator of how the economy could fare in the coming months, as long as attitudes remain the same. But it doesn’t tackle the underlying issues that continue to threaten the economy – issues which could cause consumer confidence to fall back down.”

The spokesperson added that even though consumer confidence on the whole is recovering, there are many people facing financial hardship due to fast-rising inflation over the past year, many of whom find themselves struggling with debt.

“We have been through an unusual situation for the economy over the past year, in which affordable living costs suddenly became unaffordable for many households,” she said. “The sharp rises in food, energy and petrol prices have prompted many people to cut back, but many people who were already stretched financially may have been forced into debt in order to make ends meet.

“We advise anyone who finds themselves struggling with debt to seek professional debt advice. The right form of debt management could help to bring down monthly outgoings and really relieve the pressure on those hardest-pressed by the financial crisis.”

Web Site: http://www.gregorypennington.com

Contact Details: Gregory Pennington Ltd.
Pennington House,
Carolina Way,
South Langworthy Road,
Salford
M50 2ZY

Released on: November 21, 2008, 9:48 am

Press Release Author: Virgin Money

Industry: Financial

Press Release Summary: Pre-paid cards are set to take a major slice of holidaymakers annual spending on plastic this year as tourists bid to keep summer spending under control, Virgin Money believes.

Press Release Body: Over £20 billion* spent on plastic overseas by UK travellers each year, Virgin Money says

Worries about the soaring cost of living and rising debts will boost the popularity of the cards, which enable customers to spend overseas and withdraw money but not to run up debts, Virgin Money says.

Currently up to 40 pre-pay cards are available on the market with more providers expected to launch over the coming months.

Virgin Money analysis** shows average one-off application fees for the cards are £7.08 with some firms charging as much as £19.95. However customers also need to be aware of monthly fees.

Around 40% of providers charge a monthly fee to users ranging from £1 to £5.95 while customers also need to take into account fees on spending and overseas use when budgeting for holiday spending. Typically debit and credit cards charge handling and commission fees for overseas usage which can add up to as much as £5.95 for a £100 withdrawal.

Virgin, which was among the first to launch into the market with its Pre-Paid MasterCard in July last year, has already seen strong interest from customers and expects the market to continue to grow.

Virgin Money spokesman Grant Bather said: “Everyone needs to keep their spending under control as the credit crunch and soaring inflation take a big bite out of household budgets.

“Pre-paid cards remove the temptation to run up debt while you’re on holiday as you can only spend the amount that is loaded on your card. They’re a good discipline to get into to avoid the risk of the sun going to your head and burning up your bank balance on holiday.

“And they can be more secure to carry than cash as if you lose the card you can get a replacement sent out. Plus if you really do lose control of your finances relatives or friends can load the card up with emergency cash.”

The Virgin Prepaid MasterCard charges a £9.95 application fee but unlike other cards does not charge a monthly fee. Customers can load it up for free by debit card, at Post Offices or through a bank transfer. There’s a 2.95% charge each time you use it in the UK rising to 3.5% when you use it overseas for transactions or to withdraw cash.

Customers also qualify for a range of discounts including 10% off at zavvi, first month free with Virgin Media, 10% off Virgin Wines (for over 18s), a free month’s membership at Virgin Active gyms, 20% off at Virgin Experiences and 10% off Virgin Car, Home, Pet and Annual Travel Insurance.

To apply online go to http://uk.virginmoney.com/virgin/prepaid-card/

Notice to editors:

*APACS
**Virgin Money research

Web Site: http://uk.virginmoney.com/virgin/prepaid-card/

Contact Details:
Phil Towers
Virgin Money
Discovery House
Whiting Road
Norwich
NR4 6EJ
01603215909
info@virginmoney.com

Released on: November 20, 2008, 10:27 am

Press Release Author: Gregory Pennington

Industry: Financial

Press Release Summary: With Britain’s high levels of personal debt, many people are ill-placed to cope with the financial challenges that may accompany the economic downturn, says debt management company Gregory Pennington.

Press Release Body: Responding to recent debt-related comments from Nick Clegg, Leader of the Liberal Democrats, debt management company Gregory Pennington reminded consumers that tackling their debt problems is more important than ever in an economic downturn.

New analysis, states the Liberal Democrats’ website, reveals that personal debt has risen by a total of one trillion pounds in the past eleven years – a startling ten million pounds for every hour the Labour government has been in power. Repayments to that collective personal debt stand at almost £95 billion per year, or £3,000 per second.

“Much of that debt, of course, is in the form of mortgage debt,” said a spokesperson for the debt management company. “According to the latest figures from the Bank of England (Lending to individuals: September 2008), individuals now owe a total of around £1,460 billion – and a full £1,220 billion of that total is secured against dwellings.”

“Mortgage debt is still a serious issue, with many homeowners having over-extended themselves in order to get a foot on the housing ladder. Even so, taking on a debt to acquire an asset is fundamentally different from borrowing in order to finance a lifestyle, or to pay for food, gas or petrol, as many people have grown used to doing in recent years.

“After all, the vast majority of non-homeowners still need to make monthly payments, in the form of rent. In other words, a mortgage debt needn’t actually add to an individual’s monthly financial burden – in fact, their monthly mortgage payments may well cost less than the rent payments they would need to make to live in a comparable property.

“Even so, Mr Clegg raises some valid points. Britain’s level of personal debt is, as he puts it, ‘unrivalled anywhere in the world outside of the US’, and this can be particularly dangerous in the context of a global economic downturn. Clearly, people with higher levels of personal debt are more at risk of running into severe financial problems more or less as soon as their income drops. People with little or no debt are, in general, much better placed to cope with any financial problems they may encounter as a result of the global downturn.

“As a debt management company, we specialise in debt management plans that help people bring their unsecured debts under control. But debt management is by no means the only way of coping with (and reducing) high levels of unsecured debt. People with debt problems may find they have a range of debt solutions to choose from, and should talk to a professional adviser as soon as possible – the sooner they do this, the more likely they are to get through any financial problems that may lie ahead.

“In the longer term,” the spokesperson for the debt management company concluded, “we wholeheartedly support Mr Clegg’s call for financial literacy to play a much bigger part in education. As he says, ‘maths for life is more important than trigonometry for most people’ – financial education is clearly a key part of helping future generations avoid the kind of debt problems that so many of today’s adults are facing.”

Web Site: http://www.gregorypennington.com/

Contact Details: Melanie Taylor
melanie.taylor@gregorypennington.com
0845 056 6480

Pennington House
Carolina Way
South Langworthy Road
Salford
M50 2ZY

Released on: November 20, 2008, 10:14 am

Press Release Author: Arbor Books

Industry: Financial

Press Release Summary: AS NATIONAL DEBT EXPLODES, TAXPAYERS BRACE FOR INCREASED RATES

Press Release Body: (ALISO VIEJO, CA)—In September, the U.S. Treasury Department announced that the national debt had passed $10 trillion. Now some experts believe that federal tax hikes are inevitable.

“The only way to pay down a hungry deficit is with tax dollars,” says James Burns, author of the new book The 3 Secret Pillars of Wealth: How to Crack Your Wealth Code Using the Tools of the Self-made Billionaires. “Which means we could have an entire marginal tax rate shift upwards—no matter who takes office.”

Burns says that taxpayers can help offset any increased tax burden by taking advantage of investment vehicles that allow for tax-deferred growth, such as savings-grade life insurance and Roth retirement plans in the form of either IRAs or solo 401(k) Roths.

According to Burns, investors should “opt for Roth IRAs that tax their contributions upfront, so that any taxes they pay will be on the smaller contributions put into the account rather than the larger amounts they withdraw during retirement.”

IRAs and other investment vehicles are discussed in The 3 Secret Pillars of Wealth as part of Burns’ plan for investors to take advantage of any tax breaks the government does give. His advice includes:

¤ Find investment tools that offer tax-deferred growth through retirement
¤ Consult a financial advisor before believing advertised growth rates
¤ Find a financial advisor who specializes in investment-grade life insurance if that’s what you plan on investing in
¤ Learn how to calculate tax savings as part of your profits when budgeting
¤ Avoid get-rich-quick plans that promise tax-free growth

“Even if the government is forced to raise taxes in order to pay down some of the national debt, there are enough opportunities out there to at least offset some of that burden,” says Burns.

An attorney and a former member of the United States Marine Corps Force Recon, James Burns has two degrees in law and one in taxation and international tax. He has over seventeen years of combined financial, real estate and legal experience.

For more information, contact the author directly at Jambur64@cox.net.

White Diamond Press and author James Burns chose Arbor Books, Inc. (www.ArborBooks.com) to design and promote The 3 Secret Pillars of Wealth: How to Crack Your Wealth Code Using the Tools of the Self-made Billionaires. Arbor Books is an internationally renowned, full-service book design, ghostwriting and marketing firm.

(The 3 Secret Pillars of Wealth: How to Crack your Wealth Code Using the Tools of the Self-made Billionaires by James Burns; ISBN: 0-9801620-0-9; $19.95; 128 pages; 5½” x 8½”; softcover; WHITE DIAMOND PRESS)

Web Site: http://arborbooks.com

Contact Details: Arbor Books, Inc. (ABI)
244 Madison Avenue, #254
New York, NY 10016-2819
http://arborbooks.com

Released on: November 20, 2008, 10:08 am

Press Release Author: Stephanie Demetriou/Classic Checks

Industry: Marketing

Press Release Summary: Joppa, MD November 20, 2008—Support The Make-A-Wish Foundation with this new product suite from Classic Checks. The design includes personal checks, self-adhesive address labels, personal contact cards, and a leather checkbook cover that feature modern artwork and the organization’s logo.

Press Release Body: Classic Checks is known for check designs that sponsor important causes. From designs that feature the Defenders of Wildlife to those that support The National Breast Cancer Association, Classic Checksoffers personal checks that sponsor charitable organizations. With checks printed for so many causes, the new Make-A-Wish Foundation personal checkswill fit right into the existing assortment.

The Make-A-Wish Foundation is a well-known charitable organization that grants wishes to children with life-threatening diseases. Since 1980, Make-A-Wish has made over 167, 000 wishes of children come true. The foundation’s goal is to bring laughter and peace to children and their families during heartbreaking times. Make-A-Wish has touched the lives of many children, families, and onlookers. Now, Classic Checks is helping them continue this work by giving a percentage of each purchase back to Make-A-Wish.

On November 20, 2008, Classic Checks released its new Make-A-Wish product suite. The personal checks feature the Make-A-Wish Foundation’s logo amidst colorful modern designs. This way, consumers can support a great cause with great looking checks.Classic Checks is also offering self-adhesive address labels with patterns to match the checks as well as personal contact cards and a leather checkbook cover. These two items offer the same blue and green striped design.

Classic Checks has been helping raise funds for important organizations since its creation in 1995. By supporting specific cause-based organizations, Classic Checks gives consumers the opportunity to support a meaningful cause and help spread the word about it at the same time. The new Make-A-Wish personal checks are sure to further advance the purpose of Classic Checks. Visit Classic Checks today and make your personal checks more meaningful than ever!

About Classic Checks:
Since 1995, Classic Checks has been supporting charitable organizations. By ordering through Classic Checks, you not only support a great cause, but also have beautiful checks. A portion of all check purchases are donated to the organization of your choice as well. Browse through Classic Checks today and find a design that means something to you!

Web Site: http://www.classicchecks.com

Contact Details: 1802 Fashion Court
Joppa, MD 21085
(410) 679-3300 ext. 2453
(410) 676-3300 (fax)
sdemetriou@cdi-us.com

Released on: November 20, 2008, 4:37 am

Press Release Author: Barclays

Industry: Financial

Press Release Summary: Barclays release new video highlighting the risks of online fraud that their customers may face when using the internet

Press Release Body: Barclays new video, which is presented by television reporter Spencer Kelly, outlines the key risks such as phishing and malicious software and provides advice on what can be done to avoid these threats as well as the things Barclays does to protect customers.

Barclays is a leader in online banking security initiatives having launched PINsentry in 2007. PINsentry uses a handheld card reader and chip and PIN technology to verify customers’ identities for online banking. Without the need for passwords or memorable words, PINsentry has introduced a new layer of security to online banking, with users being issued with a unique eight digit code, helping to fight fraudsters who hack into people’s computers or utilise “phishing” emails to steal login details. Over 1.5 million customers are now using PINsentry and it was recently named the Best Security Initiative at the Nominet Best Practice Challenge 2008 awards.

In June 2008 Barclays became the only bank to offer all of its customers a full freeonline security software package. The package, from award winning internet security provider Kaspersky, includes anti-virus software as well as a spam filter, parental controls, spyware, adware and firewalls and is available to all customers who are registered with Barclays online banking. As a result of these initiatives and continuing work behind the scenes, Barclays has seen a dramatic 91 per cent drop in the money lost to fraudsters from 2006 to 2007 and is the only UK bank to have seen a reduction in the number of phishing attacks.

Barclays fight against online fraud continues with a new ‘vidcast’ advising people on the best methods of internet security. The five minute video is available to watch at www.barclays.co.uk/video where viewers are also invited to post their comments including suggestions for subjects of future videos.

For more details on PINsentry, free Kaspersky internet security software and other online security information please go to www.barclays.co.uk/security.

About Barclays
Barclays is a major global financial services provider engaged in retail and commercial banking, credit cards, investment banking, wealth management and investment management services, with an extensive international presence in Europe, the USA, Africa and Asia.

With over 300 years of history and expertise in banking, Barclays operates in over 50 countries and employs 143,000 people. Barclays moves, lends, invests and protects money for over 38 million customers and clients worldwide.

For further information about Barclays, please visit our website www.barclays.com.

Video on www.youtube.com/barclaysonline

Web Site: http://www.barclays.co.uk/

Contact Details:
For more information contact:
Elizabeth Holloway
Retail Banking PR Manager
Barclays Corporate Affairs
Level 8
1 Churchill Place
London
E14 5HP
+44 (0)20 7116 6229

Released on: November 20, 2008, 5:34 am

Press Release Author: Harvey McEwan

Industry: Financial

Press Release Summary: Insurancewide.com, the UK’s original and still the best online insurance comparison service, has signed a fourth annual agreement with Tiscali, the broadband, telecoms and media company, to continue acting as Tiscali’s preferred insurance comparison partner on www.tiscali.co.uk.

Press Release Body: Insurancewide.com (http://uk.insurancewide.com), the UK’s original and still the best online insurance comparison service, has signed a fourth annual agreement with Tiscali, the broadband, telecoms and media company, to continue acting as Tiscali’s preferred insurance comparison partner on http://www.tiscali.co.uk.

The alliance offers visitors to the Tiscali website a respected online comparison service for those seeking motor, home, travel, life, pet and many other types of insurance as well as advice on how to navigate the crowded insurance market and decipher the small print.

This agreement with Tiscali is the most recent in a series of significant partnerships for the newly relaunched http://uk.insurancewide.com and further consolidates the site’s position as the leading provider of an impartial, consumer-facing insurance service.

A spokesperson for Tiscali says: “Insurancewide provides a real plus to visitors of our Money Channel and increases the probability of finding the most relevant insurer for their needs, which is the first crucial step to finding the best price.”

Insurancewide.com’s cutting edge search technology enables the service to interpret each customer’s unique, keyed-in requirements quickly and accurately, and to provide an instantly accessible list of relevant, best-value insurers.

Insurancewide supplies this online comparison technology to more than 50 websites across the UK. Many are of these are white label agreements, reflecting the credibility of Insurancewide.com for finance portals as a respected, integral part of their core service.

James Harrison, chief executive of Insurancewide.com, says: “This partnership gives us another opportunity in our rapidly growing network of partners to offer genuine choice to people who want to compare relevant insurers; we don’t just identify the cheapest prices at any cost.”

Web Site: http://uk.insurancewide.com

Contact Details: Insurancewide.com Services Ltd
90 Long Acre
London
WC2E 9RA
harveymcewan@gmail.com

Released on: November 19, 2008, 8:07 am

Press Release Author: Liz Neild

Industry: Financial

Press Release Summary: M&S Money reports sales of Dubai currency hit record levels as the QE22 prepares to leave the UK for the final time

Press Release Body: As the QE2 leaves the UK for the final time before becoming a floating hotel in Dubai, figures from foreign currency expert M&S Money suggest that the region continues to be a popular winter destination for Brits.

Last month saw the highest ever amount of sales of foreign currency for Dubai, with more than £1million worth of UAE Dirham (AED) being sold through the network of M&S bureaux de change, as well as on the phone and internet.

October’s record figure has contributed to a 15% year-on-year increase in sales of the UAE Dirham - the currency used in the seven states which form the United Arab Emirates.

Dubai and the other UAE states have grown in popularity as a destination for Brits in recent years, whether on holiday, for business or visiting friends and family.

Hotels in Dubai have reported growing visitor numbers this year. According to the Dubai Department of Tourism and Commerce Marketing there was a 22 per cent growth in hotel revenues during the first three months of 2008, compared to the corresponding quarter last year.

The Queen Elizabeth 2 (QE2) cruise liner is the longest-serving ship in the 168-year history of the Cunard line and is currently owned by Carnival, the world’s largest cruise operator.

Having now left Southampton for the last time she will arrive in Dubai later this month, where she will undergo extensive refurbishment to become a floating hotel.

Fraser Millar, M&S Money Head of Travel Services, said: “Our travel money sales figures show that the UAE Dirham is one of the most popular currencies outside the Euro and US Dollar.

“October and November are usually the peak months for sales of the Dirham as people prepare to head-off for some winter sun. The high sales figures of last month may indicate that those who are travelling to the region are taking more cash as a result of the increased cost of living in Dubai. Travellers should bear this in mind when deciding how much currency to purchase before travelling.”

According to www.dubaifaqs.com, visitors can expect to pay around:
Hotel room (per night): £50
Small car rental (per day): £17
Petrol (per gallon): £1.05
Beer (pint): £5
House wine: £30
Bottle of water (1.5 litre): 40p
Burger: £2.40
Foreign newspaper: £3

Brits spend on average £821 per visit to the UAE, or £76 per day (Figures from the
Office for National Statistics Travel Trends 2006).

- Ends -

Notes to Editors

About M&S Money:
M&S Money (originally called Marks & Spencer Financial Services) was founded in 1985 as the financial services division of Marks and Spencer Group plc. The company is now a top-ten credit card provider and the second-largest travel money retailer in the UK. M&S Money also offers travel insurance as well as providing insurance for homes, cars, travel, pets and weddings, along with loans, savings and investments.

In November 2004, Marks & Spencer sold M&S Money to HSBC, one of the world’s largest banking and financial services organisations with over 9,500 offices in 76 countries and territories. The business continues to operate under the M&S Money brand, with an executive committee comprising an equal number of representatives from HSBC and Marks & Spencer.

The company employs 1,200 staff at its headquarters in Chester, delivering personal financial services to its customers, reflecting the core values of Marks & Spencer — quality, value, service, innovation and trust.

Web Site: http://www6.marksandspencer.com/

Contact Details: For further information please call the M&S Money press office:
Liz Neild
M&S Money press office
Marks & Spencer Money
Kings Meadow
Chester
CH99 9FB
01244 686 068

Released on: November 19, 2008, 7:59 am

Press Release Author: M&S Money

Industry: Financial

Press Release Summary: M&S Money urge pet owners to ensure household medication is securely stored following increase in reports of pet poisonings

Press Release Body: M&S Money has urged pet owners to ensure medication is securely stored around the house following a large increase in reports of pet poisonings.

The potentially fatal mishap is a growing problem across the UK, with a 34% year-on-year increase in reported cases to Vetfone - a 24-hour advice line available to M&S Pet Insurance customers. Vetfone is manned by qualified veterinary nurses who can give concerned animal lovers immediate advice on a pet’s condition. Around 70% of calls to the service by M&S Money customers are made out of normal veterinary hours.

One of the major increases of poisonings seen involves nicotine-based products, including nicotine patches, chewing gum and inhalers.

The toxic dose of nicotine in dogs is five milligrams per pound pet bodyweight and a dose of 10mg/lb can be lethal. While a cigarette contains 15-25 milligrams of nicotine, nicotine patches can contain much more at between 8-114 milligrams of nicotine and even nicotine inhalers contain around 10 milligrams of nicotine. Signs of toxicity are dose-dependent and include tremors, weakness, depression and vomiting.

Vetfone Operations Manager & Senior Emergency Vet Nurse, Louise O’Dwyer, said:“It is very concerning that there has been such a large increase in reported pet poisonings.

“Nicotine poisoning can be particularly serious. Remember prevention is better than cure, so ensure products such as cigarettes, nicotine patches and gums and even ashtrays containing cigarette butts are kept away from your pets reach.”

M&S Money Insurance Manager, Judith Roberts, said: “Anyone who suspects that their pet has swallowed household medication should first try and identify what’s been eaten, by recovering packaging such as blister packs or boxes and then seek immediate veterinary advice.

“M&S Pet Insurance policyholders can rest assured that a qualified veterinary expert is available round the clock to provide advice and answer questions should a pet become unwell.”

Ends

Notes to Editors
M&S Money (the trading name of Marks & Spencer Financial Services) was founded in 1985 as the financial services division of Marks and Spencer Group plc. The company is now a top ten credit card provider and the second largest travel money retailer in the UK. M&S Money also offers a range of insurance cover, including home insurance and car insurance, as well as loans, savings and investment products.

In November 2004, Marks & Spencer sold M&S Money to HSBC, one of the world’s largest banking and financial services organisations with over 9,500 offices in 85 countries and territories.

M&S Money has an executive committee comprising an equal number of representatives from HSBC and Marks & Spencer.

The company employs 1,200 staff at its headquarters in Chester, delivering personal financial services to its customers, reflecting the core values of Marks & Spencer - quality, value, service, innovation and trust.

Web Site: http://www6.marksandspencer.com

Contact Details: For further information and to request a case study please call the
M&S Money press office:
Simon Coughlin
Media Relations Manager
Group Comms Level 41
HSBC
8 Canada Square
London
E14 5HQ.
01244 6686174
www6.marksandspencer.com

Released on: November 18, 2008, 10:15 am

Press Release Author: Melanie Taylor

Industry: Financial

Press Release Summary: Financial solutions company Think Money have welcomed the Bank of England’s shock base rate cut to 3%, commenting that the mortgage market could benefit as a result – but also warned that some lenders may be slow to pass on the base rate cut due to the continued uncertainty surrounding the mortgage market.

Press Release Body: Following the Bank of England’s shock base rate cut to 3%, financial solutions company Think Money (http://www.thinkmoney.com/) have welcomed the news, commenting that firm action is more likely to encourage banks to consider cutting their interest rates accordingly. However, they added, there are still some factors that may prevent lenders from passing on the full 1.5% cut to their mortgages and loans.

The base rate cut, from 4.5% to 3%, is the biggest cut since the Bank of England lowered the rate by 2% in 1981. The base rate now stands at its lowest point since 1955.

Many economists had predicted an aggressive cut in base rates, but the extent of the cut was still unexpected. Most predictions in the run-up to the Bank of England’s announcement pointed towards a 0.75% or 1% base rate cut – and only a few days previously, 0.5% seemed a more realistic figure.

A spokesperson for financial solutions company Think Money said: “It would seem that the Bank of England are acting based on Mervyn King’s recent statements that the recession would be long and drawn-out, and rather than take the base rate down in small increments, they have ‘bitten the bullet’ and taken it down further than most people expected.

“Potentially, it’s very good news for people and businesses looking for loans, but not such good news for savers.”

However, the spokesperson stressed that as with previous base rate cuts, there is no guarantee that lenders will pass the full cut onto their mortgages and loans – although the extent of the cut could at least increase the impact on lenders’ behaviour.

“There will still be a lot of uncertainty with regards to what will happen in the economy in the future, as well as some apprehension amongst banks as to how much they might lose from things like defaults on mortgages as the recession takes hold,” she said.

“The base rate cut only affects how cheaply lenders can borrow funds from the Bank of England. It does not directly affect the LIBOR rate, which is the measure of how expensive inter-bank lending is. Since lenders rely heavily on borrowing from each other to fund their loans and mortgages, they may well be slow to bring their rates down.

“That said, the Bank of England will have no doubt had this in mind when deciding on their base rate cut – and it may well be that such a large cut is sufficient to encourage some lenders to bring their rates down to more competitive levels.”

However, a number of banks appeared to take defensive action even before the 3% base rate had been announced, with several lenders removing tracker mortgages from their product ranges on Wednesday and Thursday morning, while others upped their interest rate margins on tracker mortgages.

“This may just be a temporary measure by lenders in order to avoid any risks in the short term,” the Think Money spokesperson said. “A number lenders have said they will be taking some time to think about their next step, so it’s possible that we will still see some significant interest rate cuts in the next week or two.”

The spokesperson was also keen to emphasise the importance of good mortgage advice. “With so much uncertainty surrounding what will happen with mortgage rates in the next few months, it often pays to speak to a mortgage adviser who understands the market. They should be able to point you towards the best mortgage deals for your circumstances, which could save you a lot of money in the long run.”

###

Resources for editors:

Homepage: http://www.thinkmoney.com/
Mortgage site: http://www.thinkmoney.com/mortgage/
Remortgage page: http://www.thinkmoney.com/mortgage/remortgage.asp
Bank of England website: http://www.bankofengland.co.uk/

Web Site: http://www.thinkmoney.com/mortgage/

Contact Details: melanie.taylor@thinkmoney.com

Think Money
Pennington House,
Carolina Way,
South Langworthy Road,
Salford Quays
M50 2ZY