The Bank of England today cut interest rates by a half point to 1%, taking the cost of borring to a new record low as it tries to drag Britain out of recession.
Today's move disappointed some in the City who had had hoped for a full percentage point cut.
It will be welcomed by borrowers and homeowners, coming just hours after the unexpected news that house prices rose by 1.9% in January. The latest data fom the Halifax put an end to months of falls and took many commentators by surprise.
If lenders pass the reduction on in full to borrowers, people with mortgages that track a point below base rate will find themselves paying no interest.
But the decision spells further gloom for savers as savings rates fall to virtually zero.
The Bank's monetary policy committee has now cut the cost of borrowing for five months in a row. Last October interest rates were still 5%, but have since tumbled to their lowest level since the central bank was founded in 1694.
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