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Bank halves base rate

Bank halves base rate

Category: Economy

Updated: 06/03/2009
First Published: 05/03/2009

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 It is now over 6 months old so the content may be out of date.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 has announced that the official base rate of interest has been cut by a further 50 basis points.

It now stands at 0.5 per cent, a new all-time low for the figure.

The decision could lead to cheaper interest payments for those with secured loans, with the rate now having dropped by 4.5 percentage points since September of last year.

Explaining the move, the Bank's monetary policy committee noted that there remains a "substantial risk" that inflation would fall below its two per cent target in the medium term.

And with the rate cut unlikely to offset this on its own, the Bank also opted to finance £75 billion of asset purchases, in a bid to boost the supply of money to the market.

Should the tactic prove successful, it could lead to the greater availability of secured loans.

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