This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/7340142.stm
The article has changed 12 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Bank lowers interest rates to 5% | Bank lowers interest rates to 5% |
| (10 minutes later) | |
| The Bank of England's Monetary Policy Committee (MPC) has cut interest rates to 5% from 5.25% to spur the economy in the face of a global credit crunch. | The Bank of England's Monetary Policy Committee (MPC) has cut interest rates to 5% from 5.25% to spur the economy in the face of a global credit crunch. |
| It is the central bank's third cut in interest rates since early December. | It is the central bank's third cut in interest rates since early December. |
| Analysts said that problems in the money markets and recent dire news on house prices drove the decision. | Analysts said that problems in the money markets and recent dire news on house prices drove the decision. |
| But the credit crisis, which makes funding mortgages more expensive for banks, may mean they do not pass on the full reduction to borrowers. | But the credit crisis, which makes funding mortgages more expensive for banks, may mean they do not pass on the full reduction to borrowers. |
| The bank said that disruption in financial markets could lead to a slowdown in the wider economy. | |
| Decision welcomed | |
| Business groups welcomed the decision and called for further cuts to shore up growth. | Business groups welcomed the decision and called for further cuts to shore up growth. |
| "It is vitally important to ensure that problems in the financial sector and in the housing market do not damage wealth-creating businesses," said David Kern, economic adviser to the British Chambers of Commerce. | "It is vitally important to ensure that problems in the financial sector and in the housing market do not damage wealth-creating businesses," said David Kern, economic adviser to the British Chambers of Commerce. |
| "Undue delay in acting threatens to reduce the effectiveness of interest rate cuts that the MPC itself has anticipated already." | "Undue delay in acting threatens to reduce the effectiveness of interest rate cuts that the MPC itself has anticipated already." |
| The cut had been widely forecast by economists. | |
| "So far the Bankâs gradual approach to cutting rates has been the right one," said Martin Temple, chairman of manufacturers' group EEF. | |
| "But, given how quickly the situation is changing, there are now greater risks to business and consumer confidence." | |
| Mortgage rates rise | |
| Homeowners on variable rate mortgages expecting to benefit from any cut could be disappointed, industry experts say. | Homeowners on variable rate mortgages expecting to benefit from any cut could be disappointed, industry experts say. |
| Before the rate decision, Alliance & Leicester said it was raising rates on its entire mortgage range for the second time this week. | |
| Nationwide is raising interest rates on some of its fixed-rate products by between 0.12% and 0.32% from Friday. |