"Deterioration in the outlook for economic activity"
These are not my words but those of the Bank of England following their aggressive 1.5% cut in interest rates taking the base rate to its lowest level in more than half a century.
Whilst it may seem like great news for house owners with mortgages that track the base rate, any feel good factor is likely to be short lived as the reality of the property slump sets in. So far house prices have dropped by 15% in the last year according to the Halifax but as I warned back in March house prices could drop by up to 37.5% (although I should reiterate this was merely an opinion and not based on any scientific calculation).
The real losers today though are the savers as interest rates are likely to be rapidly slashed and whilst inflation is forecast to come down, in the near future it will significantly erode any returns.
It's not all doom and gloom today though. For those that love Christmas (and I don't mean the big spending type of Christmas) the odds of a white Christmas have been reduced down to just 7/1 at some bookmakers today giving us a glimmer of hope for that extra special Christmas this year!