Direct lenders have held firm despite the latest cut in bank base rates and there are no signs of personal loans getting any cheaper, despite the reductions in mortgage rates. There is a growing feeling that rates have dropped as low as they can in the short term and some signs that rates will rise in the medium term. Despite the worldwide slowdown in manufacturing and commercial activity, there is little sign of the recession being felt in the high street and consumer spending continues to grow. If base rates are cut further, spending could get out of control. At the same time, banks and building societies are beginning to worry about the lack of returns to their savers. There is evidence of people taking money out of traditional investments such as savings accounts and putting it into more high risk ventures, such as property. This is not a trend the banks will want to encourage. Meanwhile, there are several added-value products available which the lenders are using to promote their personal loans. These include car related items, such as a free AA check, and more obscure incentives, such as the undefined “exciting gift” which you get in an Alliance & Leicester Christmas cracker. Dealers may feel the need to create their own incentives.