Bank of England cuts interest rates again

05/03/2009

Interest rates were taken to a new all-time low today by the Bank of England.

The Bank's nine-member Monetary Policy Committee (MPC) announced today that the lending rate would be 0.5 per cent, down from the previous level of one per cent.

Over the institution's entire 300-year-plus history, rates have never been this low.

The policymakers have been cutting the rate over recent months in order to make loans repayments cheaper for businesses and consumers.

They hope that the economy will be boosted by more people borrowing money and spending it on goods and services.

Kevin Still, EuroDebt director, said: "We hope that lenders will pass the rate reduction onto their clients, especially those struggling with their financial commitments.

"Consumers need to prioritise how they use the repayment reductions, especially if they have arrears with any priority creditors or unsecured lenders. Alternatively, it may be an opportunity to better budget for large annual expenditure items falling in April, like council tax statements and water bills."

Britain is currently facing its worst recession in decades, due to the global credit crunch.

Tags; Debt Management and Banking, Young Family Finances, Recent Graduate Debt,

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