Business News
Bank of England cuts interest rates to new historic low (1st Lead)
Feb 5, 2009, 11:08 GMT
London - The Bank of England (BoE) Thursday cut interest rates to an historic low of 1 per cent in a further attempt to stimulate the economy and stave off a deepening recession.
The bank's decision to cut borrowing costs by 50-basis-points follows monthly rate cuts since last October, when the key lending rate in Britain stood at 5 per cent.
The move comes amid expectations that the bank, having all but exhausted the tool of rate cuts, could soon move to inject billions into the economy through a process known as quantitative easing.
The Times newspaper Thursday criticized the successive rate cuts, saying they had not helped to unfreeze the credit stalemate and were punishing savers.
But the government of Prime Minister Gordon Brown has said it will do 'everything necessary' to soften the impact of the recession and get borrowing going again.
Mervyn King, the governor of the BoE, said recently that 'conventional unconventional measures' could be required to boost the economy.
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