March 6, 2009
UK Interest Rates Hit 0.5%
UK interest rates are now down to 0.5% - another record breaking statistic.
Interest rates have now been reduced six times since October, and the latest cut from February's 1% was expected.
The Bank said it would expand the amount of money in the system by £75bn - a policy called quantitative easing - in an attempt to boost bank lending.
Bank Governor Mervyn King said the policy would "eventually work".
"Nothing in life is ever certain, but these measures we think will work in the long-term," he said.
"I don't know how long it will take, much depends on the situation in the rest of the world. But if countries work together, these measures will I believe eventually work."
Chancellor Alistair Darling said that increasing the supply of money was "absolutely essential" in order for the UK to recover from the recession.
He acknowledged that the latest rate cut would be a blow to savers who faced another drop in the return on their money but said "the key thing for each and every one of us is to ensure we get the economy moving to help people and to help businesses grow".
Let's hope it helps loosen the money supply!! Got to be good news for people buying property investments?
