Bank of England 'running out of options' - Economy - News - Moneyfacts

News

Bank of England 'running out of options'

Bank of England 'running out of options'

Category: Economy

Updated: 06/03/2009
First Published: 06/03/2009

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The Bank of England is unlikely to cut interest rates any further, it has been suggested.

Yesterday the Bank's monetary policy committee opted to halve the base rate to 0.5 per cent - its lowest ever level.

And with the announcement that it would seek to boost lending by printing more money, Liberal Democrat shadow chancellor Vince Cable stated that it has "now run out of conventional weapons".

Describing the move as "understandable", he remarked: "Even with interest rates at a record low, the banking system is still in chaos with many families struggling to make ends meet."

Meanwhile, chief economist at the Royal Institution of Chartered Surveyors Simon Rubinsohn noted that increasing the amount of money is "vital".

Such steps are in part designed to improve the availability of finance such as secured loans and he added that this may come with enhanced confidence.

But Neil Young, chief executive of Young Group, warned that the five previous rate cuts have not succeeded in encouraging lenders to provide credit.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Base rate remains unchanged in surprise decision

Earlier today, the Bank of England’s rate setting committee announced that it had voted decisively to keep base rate on hold at its record low of 0.5%. But what does it mean for you?

Budget 2016 – an overview

Well, George Osborne has just revealed the Budget for 2016 – his eighth so far as Chancellor – and as ever, there were some winners and losers from the whole thing. Below is a quick overview of the key points.

What does a US Fed rise mean for the UK?

The US Federal Reserve has decided to raise interest rates, and although you may not think that financial events happening in the US will have much of an impact on UK soil, you may be surprised…
 
Close