Interest rates hit all time low

The base interest rate in the UK has hit its lowest level since the Bank of England was founded over three centuries ago, after the latest base rate cut took the rate down to just 1.5 percent. The Bank of England announced last week that it was cutting the base rate by a further 0.5 percent following the January Monetary Policy Committee meeting.

Whilst the rate cut has brought the interest rate down to its lowest level ever some industry groups, such as the EEF, have said that the cut was not aggressive enough, and that it should have been lowered even further given the current economic climate. However, it is thought that after several months of aggressive cuts the central bank is being more cautious about cuts.

One industry official said that the most recent cut was a welcome move by the central bank, but that it needed to ensure that it did not stop there and continued to cut rates over the coming months. She stated: “With survey data continuing to languish at record lows – manufacturing and services surveys in the past few days have confirmed that activity is falling sharply – we see no reason for the Bank to hold back in cutting interest rates to 1% or below in the coming months.”

Speaking of the Bank of England statement, another official said: “There is a hint in its statement that it may sit tight for a while to assess the impact of the big reductions over the last couple of months.”