4 Dec

Bank slashes base rate to 57-year low

Bank slashes base rate to 57-year low

The Bank of England's monetary policy committee (MPC) has cut the base rate by one per cent, bringing the figure to a 57-year low of two per cent.

In its statement on the move, the MPC explained that the "substantial" risk of the consumer prices index figure undershooting its target of two per cent - which it warned of in its inflation report last month - has now increased.

The cut is the third reduction in as many months, with the base rate dropping by three fifths in that time.

Such a reduction may help lower the cost of mortgages.

Responding to the news, National Association of Estate Agents chief executive Peter Bolton King said it was important for lenders to pass on the cut, but emphasised that more action will be required.

He added: "Government and lenders must do more to encourage first-time buyers on to the property ladder in order to reverse the current downturn in the market."

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