The VAT cut may have been economically and electorally irrelevant, but might all these interest rate cuts deliver for Gordon Brown? History will be made tomorrow when the Bank of England cuts rates to the lowest in its 315-year history – probably by half a point, to 1.5%. And even that will probably fall to 1% before Easter. A friend emails to say he has become a “reluctant buyer of Gordon Brown stock” – his mates are getting cheap mortgage deals, at 4% or 4.5%, saving hundreds a month. This will create a feelgood factor amongst a certain group.
Once rates do fall to 1%, of course, the Monetary Policy Committee will have run out of ammo. That’s when things like printing money, or quantitative easing to give it its euphemistic name, come on to the agenda – and sterling (now back up to 1.10) looks vulnerable again. But for those with 25% equity in their house, there are plenty of good deals to be had – yet my hunch is that those in this category will be likely Tory voters. But there is no denying it: for those with job security, a bit of equity and a variable mortgage, 2009 will not be a bad year at all.
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