UK interest rates have been cut by 0.25% to 5.5% by the Bank of England's Monetary Policy Committee (MPC) it was announced today.
The news will come as a relief to homeowners and other borrowers, who have seen a succession of rate rises, which have pushed up their monthly repayments.
There will also be celebration among retailers, who were expecting a relatively slow Christmas period as consumers would have to put more money towards paying their mortgage and credit card payments than on festive spending.
In recent weeks, many business and market commentators have called on the Bank to cut interest rates to prevent a possible recession.
Minutes from the MPC’s last meeting revealed the Bank saw an economic need for lower interest rates to help boost spending, but the MPC was also nervous about the effects of inflation, which was still above 2% in the latest Retail Price Index figures.
Further rate cuts are expected next year, with most analysts predicting rates will fall to 5% by the end of 2008.
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