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January 1, 2009updated 12 Apr 2017 12:00pm

Interest rates cut to historic low of 1.5 per cent

The Bank of England today announced that interest rated are to fall to their lowest ever level-- 1.5 per cent.

By MF Editorial

The Bank of England today announced that interest rates are to fall to their lowest ever level – 1.5 per cent.

“At its January meeting, the [Monetary Policy] Committee noted that the recent easing in monetary and fiscal policy, the substantial fall in sterling and the prospective decline in inflation would together provide a considerable stimulus to activity as the year progressed.

Nevertheless, the Committee judged that […] there remained a significant risk of undershooting the 2% CPI inflation target in the medium term at the existing level of Bank Rate. Accordingly, the Committee concluded that a further reduction in Bank Rate of 0.5 percentage points to 1.5 per cent was necessary to meet the target in the medium term,” the Bank said.

Director of the RMIF’s National Franchised Dealers Association, Sue Robinson said: “The Government’s reliance on interest rate reductions to stimulate the economy should be part of a wider package of measures, and we urge that more direct approaches are used as soon as possible.

“Although interest rate reductions will help borrowers, it will conversely penalize savers, and those people reliant on interest for their disposable income. Unless counterbalanced with tax cuts and business support measures, further interest rate reductions could have a negligible effect on the economy.”

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