Interest rates cut to 5.5%
Interest rates have today been trimmed from 5.75% to 5.5%, which will no doubt be a relief to homeowners on variable rate mortgages but will mean lower rates for savers. The cut is the first since August 2005.
The quarter-point cut will take around £10-15 a month off the repayments of a typical £100,000 mortgage.
Analysts had said that the Bank’s decision was one of the hardest it had faced during the last 10 years due to fears about inflation and the affect that a rate cut may have on price growth.
The Bank of England had been under immense pressure to trim rates in order to respond to weaker data from the housing market and the wider economy.
Expectations of a rate cut had increased over the last few days after figures suggested that economic conditions had deteriorated over the last few weeks.
The Bank of England is not the only central bank to have been concerned amid a slowing economy. Earlier this week, the Bank of Canada trimmed rates to 4.25%. Furthermore, the US Federal Reserve is expected next week to enact its third rate cut in as many months. US rates are currently at 4.5%.