This time last year, interest rates were falling as the Bank of England desperately tried to minimise the impact of the economic downturn.

The base rate has been at its current level of 0.5% since last March and, with the economy still in recession, it is not expected to start rising again any time soon.

In the last few days, a poll on the website found that 45% of our visitors are still very worried about the economy, while 37% said they are less nervous than they were a year ago but believe there is more bad news ahead.

So how have personal finance products fared over the month since the MPC last sat down to hammer out the base rate?

What now for borrowers?

Last month, analysis by showed that the number of people coming to the site to look for a loan grew by a fifth in 2010 but that new lending actually fell by 28%. That shows  mortgage lending is still far from normal pre-credit crunch levels.

As well as that, eight out of the nine big personal loan providers are only offering loans to their existing current account customers – that’s why has adapted its loans comparison page so you can specify the bank you’re with and check which products you qualify for.

The average of the five best unsecured loan rates is 9.06%, which is up 0.50 percentage points on the start of 2009.

What now for savers?

Meanwhile, savings rates are definitely down compared to 12 months ago, which is not surprising as the base rate fell to its historic low in March. The best easy access savings accounts are paying an average of 3.04%, compared to 4.41% a year ago.

If you’re a saver, it may seem like a bad time to put money aside. However, there are still some really competitive deals to be had compared to the base rate. Banks and building societies are battling for savers’ cash, and Kevin Mountford, head of banking at, predicts 2010 will be good for savers.

“We will see some competitive fixed rate bonds early in the year and into March, with the focus on switching ISAs as the new higher allowance kicks in from April,” he said.


What now for mortgages?

It’s been an incredibly tough 12 months for people looking for mortgages, with 1,000 fewer products available now than there were this time last year.

The number of lenders offering 95% loan-to-value mortgages fell and it’s really only been those with 40% or more equity who’ve been able to benefit from the low base rate, snapping up deals as low as 1.98%.

Hannah Skenfield,’s mortgages expert, predicted: “I expect the 2010 mortgage market to be similar in shape and size to 2009. Lenders will maintain a tight rein on credit, and the competition for the 'best' customers will increase.

“First-time buyers will struggle to get on the property ladder - a situation not helped by the end of the stamp duty holiday on January 1, 2010. We will see more products available at higher loan-to-value rates, however, these will remain more expensive than products for customers with large deposits.”

Many people will choose to move to tracker mortgages as the rates are competitive but Hannah warned mortgage holders to be careful, as a rise of just a few percentage points could mean that monthly payments quickly become unaffordable.