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Bank of England cut interest rates to 1.0%

The Bank of England has cut interest rates from 1.5% to 1.0%, the fifth time since October that interest rates have been reduced.

In October 2008 the interest rate stood at 5% and the last rate cut in January brought the rate to 1.5% - the lowest in the Bank's 315-year history.

Many business leaders, including the Federation of Small Businesses (FSB), had called for the rate to be maintained. In a survey of FSB members 63% wanted rates to remain at their current level, compared with only 24% who wanted a further cut.

The cut is designed to boost the flagging UK economy, which is now in recession following two consecutive quarters of negative economic growth.

Office for National Statistics figures showed that the economy contracted by 0.6% between July and September, and by 1.5% from October to November.

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Post Date: February 5th, 2009