Cut in Interest Rate by 0.25 Percent

Last Revised on September 5, 2009

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Did you hear about new of reduce in interest rates by the Bank of England? It cut the interest rate down by 0.25 per cent to 5.5 per cent. It happened mainly due to signs that the UK economy is little bit slowing down. This happens at the time when the US government is taking the same initiative.

This rate cut will help borrowers a lot and thus have the potential to boost the economy. It may help move people look into their home mortgage as well. The bigger cut was ruled out as it wanted to address the slower economic growth while still maintaining the inflation under control.

Meeting every, month, the MPC makes its decision on the interest rates based on the result of a vote by its nine members. Ray Boulger, of John Charcol, said: “With the Monetary Policy Committee (MPC) receiving significant criticism for not cutting the rate for a second consecutive month in January, after a unanimous vote for the December cut, together with discussion on whether a 0.5 per cent cut might be necessary to achieve economic stability, there was never any real doubt on the outcome of today”s meeting.”

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