Base rate cut by 0.25%
In response to signs that the UK economy is slowing down, the Bank of England has cut the base rate of interest by 0.25%.
Widely predicted by financial experts, the cut will be welcomed by borrowers, the day after energy supplier E.On became the latest major power company to raise prices. The Bank ruled out a larger cut, trying to stimulate slower economic growth, whilst being wary of a potential rise in inflation. Ray Boulger of John Charcol said:
“With the Monetary Policy Committee (MPC) receiving significant criticism for not cutting the rate for the second consecutive month in January, after a unanimous vote for the December cut, together with discussion on whether the 0.5% cut might be necessary to achieve economic stability, there was never any real doubt on the outcome of today’s meeting.” Mr Charcol added:
“The MPC is now effectively running hard to stay still.”