5
Mar
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.
