Interest rate cut saves farmers 20m

08 October 1998

Interest rate cut saves farmers £20m

By FWi staff

FARMERS stand to save about £20 million from todays cut in interest rates.

The Bank of England announced a 0.25% cut in interest rates to 7.25% after the monthly meeting of its Monetary Policy Committee (MPC) this morning (Thursday).

National Farmers Union economists calculated the cut will mean a saving of about £20m on agricultural borrowings over the next twelve months.

But further action is still needed to enhance agricultures competitiveness, warned NFU President Ben Gill.

“The strength of Sterling has been one of the main reasons behind the severe economic crisis crippling British agriculture,” Mr Gill said.

“Continuing downward pressure on interest rates and Sterling is vital if agriculture is to find its way out of this current depression.”

Farm borrowings currently exceed £7bn and the NFU has long urged for a cut in interest rates.

This mornings rate cut was widely predicted after Chancellor Gordon Brown slashed his growth forecasts for Britains economy.