5 Mar

Bank cuts base rate to new low

Bank cuts base rate to new low

The Bank of England base rate has been cut to a new record low level of 0.5 per cent.

At noon today it was revealed that the rate had been slashed in half, having previously been set at one per cent.

In its announcement, the monetary policy committee said that continued economic weakness and the prospect for consumer prices index inflation to undershoot its two per cent target later this year had prompted the decision.

Such a move may help lower the cost of mortgages for first-time buyers.

The Bank also announced a £75 billion programme of asset purchases to boost business credit, stating that this extra action will also be needed to help prevent inflation falling too low.

It is the sixth month in a row that the Bank has lowered the base rate, which stood at five per cent before the October 2008 meeting.

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