Bank of England cuts interest rates
Published On 7 February 2008
The Bank of England's Monetary Policy Committee (MPC) has opted to cut interest rates by 0.25 per cent.The MPC decided that the rate should be reduced to 5.25 per cent as a result of the deterioration of prospects for output growth abroad and the disruption to global financial markets.
It added: "In the United Kingdom, credit conditions for households and businesses are tightening. Consumer spending growth appears to have eased.
"These developments pose downside risks to the outlook for inflation."
The Council of Mortgage Lenders (CML) reacted positively to the news that the Bank had opted to cut rates.
"This is good news for the quarter of UK borrowers on tracker rates who will see an imminent reduction in rates," explained CML director general Michael Coogan.
"However, borrowers should not expect that a base rate reduction will automatically result in a cut in standard variable rates or discounted rates across the market."
He added that lenders have a complex system for determining mortgage interest rates and so some borrowers might not see any immediate change.
