Its unlikely that banks will pass the whole cut because of concerns about
- the need to attract savers to offset the freeze in the wholesale market
Those who are likely to benefit from the rate cut are
- Businesses with variable rate loans whose cost will be reduced therefore easing the pressure on profitability from lower sales
- Homeowners whose mortgages have interest rates that are variable, discount variable, and those that track BoE rate. Average house prices are just £200k, so somebody may save around £200 per month. Some of this will go into consumption.
- Business mortgage holders. Ditto
- Credit card holders. Uk gova is already mouthing off about many credit card providers who have been increasing APR despite interest rates going the other way. Any cut here will again feed through into consumption
- Weaker £ will help exporters.