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Wednesday, March 04, 2009

The Contrarian Stance

As the Bank of England gears up for quantitative easing (ie printing money) and a likely further cut in interest rates (decision due tomorrow), Woolwich (the mortgage arm of Barclays) has (as per The Times) increased its fixed and tracker rates by up to 0.3% points. A two year tracker for borrowers with a 40% deposit has increased from 2.74% above base to 2.99% above base. The fee is £995.

Woolwhich justifies this move on an increase in demand for their products and an increase in mortgage funding costs.

Clearly they are expecting a rate reduction announcement tomorrow!

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