Base rate cut could benefit those in debt

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The cost of borrowing could be set to reduce in pursuit of the base rate, which this week fell to 5.5 per cent.

Such is the opinion of Beccy Boden Wilks, spokesperson for financial advisory service the National Debtline.

According to Ms Boden Wilks, lenders may opt to lower their interest rates in accordance with the 0.25 per cent reduction effected by the Bank of Englands monetary policy committee.

"People who are coming off their fixed-rate mortgages might start to feel the difference, if the various interest rate rises have taken them above what they were paying before," she asserts.

The spokesperson predicts that this could see monthly repayments fall by up to £80 on a £200,000 mortgage if a further rate cut were to be made.

However, with the credit crunch still taking effect, she warns against switching between different types of cheap credit as a means of reducing costs.

Despite the reduction in the base rate, she argues that the availability of such forms of credit continues to diminish.

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