Base Rate falls further

05 February 2009

The Bank of England has cut interest rates again today, down to a new record low of 1%.

Today's cut was widely expected by market commentators, though many critics doubt further rate cuts will do anything to boost the ailing economy.

Interest rates have fallen by 400 basis points since last summer and dropped below 2% for the first time in the central bank's 315-year history last month.

Policymakers and the Government hope lower rates will encourage consumers to borrow and spend to drag Britain out of its recession.

However, some mortgage lenders have declared they will not pass on any further cuts to their borrowers and many are unwilling to lend to consumers who do not have a substantial deposit.