Back in December 2007 the Bank of England decided that the recent peak interest rate of 5.75% was too high and started to reduce rates, albeit carefully. Some analysts suggested that the steps taken were not bold enough and the committee responsible for the rates was adopting a "suck it and see" approach.
The Bank approved three rate reductions in close succession, but during this period the lending sector in the UK was undergoing unprecedented turmoil. Substantial numbers of loan companies were going out of business or at least laying off staff and the availability of cash for loans was a major issue.
This lack of cash and the nervousness of lending to higher credit risk borrowers has not alloweed lenders to follow these rate reductions and fixed rate loans are still as expensive as they were last summer.
