So then, another rate cut on Thursday takes the UK interest rates down to 5.25% from February. There was a similar quarter % cut in December, but the Bank of England refused to panic in January and slash rates - unlike the Fed back home.
Stock market turmoil seemed to force the Federal Reserve to cut its target rate substantially last month. It now sits at 3%, although just one month prior it had been at 4.25%. In the short term, a little more positivity has returned to the world markets, but they haven't made a full recovery to pre January levels, having endured a terrible start to the year. Things look as though they might get ugly again soon as well, with stock markets regularly going into the red this month. The Dow Jones has a massive loss on Tuesday (5th) and it makes me a little worried about things.
If, like me, you've got some stocks, then you might be looking for a good moment to pull the plug. I know I am! I want to have my money out for about this time next year, and with things being forecasted to be bad in 2008, I'm not feeling too good about the whole venture. I bought some in mining company Rio Tinto after they received an offer from BHP in November, and it's been quite a roller coaster ever since! Basically, if my stocks break even again, then I'm out of the market. I kind of wish I'd just stuck my savings into an ISA or something for the longer term, but I'll always say that in retrospect.
While the interest rate cuts will probably help the stock market momentarily, I'm sure it'll also be music to the ears of many people who own property over here. Mortgage rates have been going up with interest rate rises over the last few years, and with house prices getting a bit ridiculous lots of people are paying more than they can afford. It also means that loans will probably get cheaper, so things might get rosier for those with good credit histories who are likely to avoid the worst of the Credit Crunch. Alliance and Leicester offer some pretty cheap loans, so I'll be keeping my eyes open if their prices go down further over the next couple of months.
