Record cut in Interest Rates

The Bank of England monetary policy committee have today announced a 1.5% cut in interest rates reducing it to 3%. There has been a marked downturn in economic activity in the Uk and abroad over the last couple of months and this teamed with the global banking systems most serious disruption for almost a century since mid September has lead to money and credit conditions being tightened this in turn has had a knock on effect with consumer spending being cut drastically in the face of reduced household budgets and tighter credit. The risk of inflation has in recent weeks taken a turn downwards which has helped the committee to decide, it is still too early to speculate how much of a positive impact this will have on individual households with Mortgage lenders reluctant to commit on whether they will pass on these cuts despite increased pressure from the Government.