Bank of England reduce base rates to 2%
Bank of England Reduces Bank Rate by 1.0 Percentage Points to 2.0%
4 December 2008
The Bank of England's Monetary Policy Committee today voted to reduce the official Bank Rate paid on commercial bank reserves by 1.0 percentage points to 2.0%.
The reduction in rates to 2% is against the background of a deepening recession both in the United Kingdom, and worldwide,
Business confidence and investment are very low and credit markets remain extremely difficult. It is hoped that the reduction will help towards the return of normal lending.
It is expected that the poor consumer spending figures and the reduction in commodity prices will help drive down inflation.
The previous change in Bank Rate was a reduction of 1.5 percentage points to 3.0% on 6 November 2008.
The European Central bank is meeting later today and we are expecting a lowering of rates by .5 percentage point to 2.75%.