The Bank of England has lowered interest rates to an all time low of just 0.5%, and also stated that it would be boosting the money supply to help the UK’s economy. The newest rate cut has been widely expected and is the sixth time that interest rates have been cut since October last year.
The bank will also boost the money supply in the UK by up to £75 billion in a bid to increase bank lending. This process is called quantitative easing, where a central bank creates more money to boost an economy by buying hard to sell assets from companies and banks; this in turn helps commercial banks lend money.
Sceptics have been attacking recent rate cuts, saying that it has not encouraged the commercial banks to lend more, with many of them saying that rate cuts are becoming ineffective in stimulating the economy.
4 Responses
People with tracker mortgages are well away then with these low interest rates
Posted on March 6th, 2009 at 2:56 am
You watch them moan and cry when the interest rates shoot back up again, swings and roundabouts
Posted on March 6th, 2009 at 6:39 am
Don’t think they can lower it anymore
Posted on March 10th, 2009 at 3:28 am
It has to rise soon, as banks are slowly starting to lend again
Posted on March 31st, 2009 at 6:49 am
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