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Bank of England cuts interest rates to 5 percent
11 April 2008
The Bank of England`s monetary policy committee (MPC) has decided to cut interest rates by 0.25 per cent to five per cent amid growing unrest in the financial markets.
As expected, the MPC took the decision to cut the rate in order to reduce the cost of borrowing and – hopefully – boost the economy.
Many major banks and financial institutions welcomed the move by the Bank.
A statement from Abbey said: "It is unclear whether the size of the rate cut provides the adrenaline shot needed to restore confidence amongst borrowers and ultimately the only customers that are guaranteed to feel the cut are those already on existing tracker deals."
Almost instantly, First Direct passed the rate cut on to its customers, lowering the amount of interest it charges on standard variable rate mortgages from 6.2 per cent to six per cent.
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