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The news section has details of proposals to change how housing costs are determined. Currently 5.88% the proposal is to cut to the bank of england base rate. But thats only 4.75. It does talk of the BofE rate as a "baseline" but does anyone smell a rat in the treasury.
The BofE rate is used as the base on which the Building Societies base the mortgage rate and then lump on their own interest charge. Look at fixed rate mortgages and after the initial term the average interest jumps to BofE base rate plus about 1.95%, well above the current 4.75%.
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