Rate cut 'unlikely to make much difference'

The cut in the base rate level of interest is unlikely to make much difference to credit conditions in the UK, it has been claimed.

Earlier today, the Bank of England's monetary policy committee voted to reduce the current rate by a quarter of a percentage point to five per cent.

According to David Kuo, head of personal finance at Fool.co.uk, only those who are in the best positions financially will survive what he describes as the mortgage market "jungle".

Indeed, the body pointed out that the UK's biggest lenders offer an average standard variable rate of 7.2 per cent - more than two per cent higher than the base rate.

"If you can, you should use emergency savings to reduce the size of your loan. Others have to assume the worst which will mean tolerating unattractive and expensive mortgages until credit conditions improve," said the expert.

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