Interest rate cut welcomed 'but more needed to help households'

THE Bank of England yesterday cut the UK's main interest rate for the first time this year, providing a welcome boost to home owners and businesses.

- Katie Elliott

Its Monetary Policy Committee voted to reduce the base rate from 4.75% to 4.5% in a 7-2 split and Bank Governor Andrew Bailey signalled more reductions could follow. He said: "It will be welcome news to many that we have been able to cut interest rates again. We'll be monitoring the UK economy and global developments very closely and taking a gradual and careful approach to reducing rates further." Last night, there were calls for more cuts to help households and businesses.

TUC General Secretary Paul Nowak said: "This rate cut is badly needed to help lift the economy out of stagnation.

"The Bank must now keep moving with further cuts to support households and businesses in the months ahead.

"Lower borrowing costs will ease pressures on households, leaving families with more to spend, and make it more affordable for businesses to invest and grow." Mr Bailey said further cuts are likely, but the pace and scale will depend on economic conditions at the time.

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