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/7232304.stm

The article has changed 12 times. There is an RSS feed of changes available.

Version 0 Version 1
Bank cuts interest rates to 5.25% Bank cuts interest rates to 5.25%
(10 minutes later)
The Bank of England's rate-setting committee has cut interest rates to 5.25% from 5.5% in an attempt to stimulate growth in the UK economy.The Bank of England's rate-setting committee has cut interest rates to 5.25% from 5.5% in an attempt to stimulate growth in the UK economy.
This follows recent rate cuts by the US Federal Reserve, which sliced rates from 4.25% to 3% amid fears of the widening impact of the credit crunch. But the Bank of England said that growth needs to slow to keep inflation under control.
The decision follows recent rate cuts by the US Federal Reserve, which sliced rates from 4.25% to 3%.
Many analysts expect more UK cuts this year, but say inflation fears will stop the UK cutting rates as much as the US.Many analysts expect more UK cuts this year, but say inflation fears will stop the UK cutting rates as much as the US.
The Bank said in January that the risk of inflation had "worsened markedly". "Inflation at 2.1% in December was close to the 2% target, but higher energy and food prices are expected to raise inflation, possibly quite sharply, in the coming months," the Bank's statement said.
While the most recent UK inflation data showed that national consumer price inflation remained at 2.1% for the third month in a row in December, energy prices have increased substantially since then.
The rate decision came shortly after E.On became the fifth major power company to raise gas and electricity prices this year.The rate decision came shortly after E.On became the fifth major power company to raise gas and electricity prices this year.
Further cutsFurther cuts
The employers' organisation the CBI welcomed the cut and said it was pleased there had not been a bigger cut.The employers' organisation the CBI welcomed the cut and said it was pleased there had not been a bigger cut.
"It is clear that it is a delicate balance with inflation pressures," said the CBI's Ian McCafferty."It is clear that it is a delicate balance with inflation pressures," said the CBI's Ian McCafferty.
"A quarter point now and then watching very carefully for how inflation develops in the coming months is the best strategy.""A quarter point now and then watching very carefully for how inflation develops in the coming months is the best strategy."
But the British Chambers of Commerce disagreed.But the British Chambers of Commerce disagreed.
"Threats to growth are much more acute now than risks of higher inflation, and we would have welcomed a bold UK move to 5% today," said its economic adviser David Kern."Threats to growth are much more acute now than risks of higher inflation, and we would have welcomed a bold UK move to 5% today," said its economic adviser David Kern.