The news quoted that never since gravity had been discovered had the Bank Of England base rate been so low as the recent reduction down to 1.5%. Of course they were refereeing to the fact the Bank Of England was set up the same year as Newton dropped his apple, and in this period of time, never has the rate been so low.

Of course the newsmen went out on to the streets to get the reaction form the public, just to be told that cheaper mortgages would not encourage them to spend more and in fact they would use any savings to reduce their debt, not spend more or increase it. Business owners were quoted as saying that the bank rate was OK anyway, the problem was getting banks to lend to them in the first place.

The media seems to be delivering two messages, one from those who are still ion a job and have not been effected by the credit crunch, they are still getting paid, prices in general are dropping, fuel is no longer as expensive it was and they are benefitting from cheaper mortgage, providing they already have one of course. We are often hearing the words “Credit Crunch What Credit crunch”? The second message is from those who either do not own a home or are looking for one, or those who have been made redundant recently. This is the group who are finding it hard through this hard financial time.

Take those first time buyers. House prices have dropped, good news for them and mortgage rates are now also dropping, and so many are at a point where they feel they can get on the mortgage ladder. The problem is of course, they now need a substantial deposit to secure a mortgage, with the worry that the house they will be buying may put any borrower into a negative equity situation. The next stumbling block is that many lenders will not longer take bonuses or even overtime into account as part of the borrowing calculation. Finally those who work within certain industries may find it harder than others. It is unlikely that anyone in the car business will be looked on favourably at the moment with factories either reducing the workforce or working weeks.

So will the Bank Of England Interest rate drop help the economy. Well if you believe the news, it probably will not. But lets be honest, were all opinions expressed on TV, or were selected interviewees aired only, to ensure an interesting news item?

This is for you to decide!!