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| Version 3 | Version 4 |
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| Bank cuts interest rates to 5.25% | Bank cuts interest rates to 5.25% |
| (20 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. |
| But the Bank of England said that growth needs to slow to keep inflation under control. | 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%. | 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. |
| "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. | "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. |
| 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 cuts | Further 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. |
| Rate cut could drive bike firm | Rate cut could drive bike firm |
| "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. |
| Mortgage rates | Mortgage rates |
| Some observers had voiced concern that not all mortgage lenders would pass the interest rate cut onto their customers, limiting the cut's impact on the economy. | Some observers had voiced concern that not all mortgage lenders would pass the interest rate cut onto their customers, limiting the cut's impact on the economy. |
| HAVE YOUR SAY I have been crunched, chewed and spat out as far as credit goes Michelle Willoughby, Durham Send us your experiences | |
| But many banks have already said they will pass on the cut. | But many banks have already said they will pass on the cut. |
| Halifax, Nationwide, Abbey, NatWest and Royal Bank of Scotland have announced they will reduce their standard variable rates. | Halifax, Nationwide, Abbey, NatWest and Royal Bank of Scotland have announced they will reduce their standard variable rates. |
| Others had said in advance of the announcement that they would pass on the rate cut in full. These include Lloyds TSB and its Cheltenham & Gloucester unit, Barclays' mortgage arm the Woolwich, HSBC and First Direct. | Others had said in advance of the announcement that they would pass on the rate cut in full. These include Lloyds TSB and its Cheltenham & Gloucester unit, Barclays' mortgage arm the Woolwich, HSBC and First Direct. |
| Many of them will not be cutting their rates for existing borrowers until 1 March, with HSBC not cutting until 7 March. | Many of them will not be cutting their rates for existing borrowers until 1 March, with HSBC not cutting until 7 March. |
| Interest rates will also be cut for savers. | Interest rates will also be cut for savers. |