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Bank of England slashes lending rate
4 December 2008 16:34
The Bank of England has opted to slash the base lending rate by a full one per cent following its meeting today (December 4th).
Officials on the Bank's monetary policy committee made the decision to go to two per cent on the back of flattening the interest rate by 150 basis points in November.
While it remains to be seen exactly how many financial institutions will pass on the rate, and to what extent, the move has already been warmly received.
Chris Cummings, director general of the Association of Mortgage Intermediaries, said that the base rate cut was welcomed, and furthermore signalled that the Bank was aware of the extensive economic difficulty the country was facing.
However, he added, that cut on its own would not help anyone as radical changes are needed in order to encourage banks to start lending again.
Earlier in the week, Lloyds TSB and Cheltenham and Gloucester vowed to pass on the base rate reduction to its standard variable rate mortgage holders.
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