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Base Rate dropped to 5.25%
Rates dropped to 5.25 per cent
7 February, 2008
The Bank of England reduced interest rates to 5.25 per cent today.
There were calls for a second consecutive cut in January, but it was not forthcoming and the request was not heeded by the Monetary Policy Committee (MPC), February’s Base Rate decision was therefore much more important.
Commentators have insisted that a rate cut was vital in warding off further economic destabilisation as talk of a US recession intensified during January.
This being the second rate cut since August 2005 and follows the US Federal Reserve’s emergency action which saw rates slashed by 1.25 per cent over an eight-day period.
Lenders have already responded to the decision, with Woolwich, Nationwide and HSBC pulling their SVRs back by the full amount.
The average borrower will save just under £30 per month on a 25-year £200,000 repayment mortgage.
