4 August 2005
There is good new for anyone thinking of taking out a loan as the Bank of England (BoE) has announced a cut in its baseline interest rate.
The BoE's Monetary Policy Committee announced it was cutting the rate in response to a slowdown in the UK economy.
Analysts predict that the quarter-point cut, from 4.75 per cent to 4.5 per cent, will revive growth and consumer spending.
But the news also means anyone looking for a loan will benefit from a lower rate of interest on their repayments.
Praising the decision Graeme Leach, chief economist at the Institute of Directors (IoD), said: "The IoD had called for a quarter point reduction in interest rates and so today's decision by the Bank was welcome news.
"Failure to cut rates now could have seen a more pronounced 'shift-to-thrift' by companies and consumers. The new lower rate of 4.5 per cent will help put a floor under business investment and household spending growth."
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