Interest Rates Cut To 314 Year Low

The Bank of England has reduced interest rates to 1.5%, the lowest level in more than 300 years.The rate cut under means that for the first time since the Bank was established in 1694 the rate is below 2%.

In its statement today, the Bank warned that the pace of contraction in the economy during the past quarter would prove more severe than the already steep 0.5 per cent decline suffered in the previous three months, and that "output is likely to continue to fall sharply during the first part of the year"

RICS chief economist Simon Rubinsohn said: “The decision to lower interest rates today to just 1.5%, while welcome, is unlikely to provide any meaningful encouragement for banks to increase the availability of finance to either households or businesses. Indeed, the risk is that lenders are set to become even more restrictive over the coming months in the face of the worsening economic climate.