Bank of England cuts interest rate to 5%

The Bank of England sparked applause in financial markets and relief among homeowners across the country today when it cut interest rates for the second time this year and the third in five months.

Gary Duncan, Economics Editor, The Times - 10 April 2008

The quarter-point cut in borrowing costs follows earlier cuts in February and December, and lowers rates to 5 per cent, a level last seen at the start of 2007.

The move, widely expected in the City, was confirmed by the Bank’s Monetary Policy Committee (MPC) amid mounting fears over the economic toll from the growing credit squeeze and an accelerating slide in house prices.

Homebuyers and the City will hope that the MPC’s latest effort to shore up economic prospects will help to ease resurgent money market strains and end the mortgage drought that has seen the ready availability of home loans dry up, and the cost of those still on the market jump - full article