Quarter-point cut for interest rates

The Bank of England has cut interest rates by 25 basis points to 5.25 per cent. The cut from the monetary policy committee (MPC) comes as the UK economy looks set to slow in 2008 – as the credit crunch, with borrowers tightening their lending, and high debt levels combine. The MPC said the decision […]

King to stay at Bank of England

Mervyn King will continue to serve as governor of the Bank of England, it was confirmed this morning. The 59-year-old was reappointed by the Queen after Gordon Brown finally affirmed his confidence in the governor. There had been widespread speculation Mr King’s re-appointment hung in the balance as a result of his initial response to […]

Bank ‘hamstrung into interest rate hold’

The Bank of England would have cut interest rates today if it had a sufficiently broad remit, the Liberal Democrats economic spokesman has claimed. Instead the Bank’s monetary policy committee (MPC) voted to hold interest rates at 5.5 per cent, despite many pundits predicting a fall. After increasing the underlying cost of borrowing three times […]

Bank cuts interest rates amid falling house prices

The Bank of England today voted to cut interest rates amid increasing reports of an economic downturn. The Bank’s monetary policy committee (MPC) voted to reduce interest rates by a quarter of a percentage point to 5.5 per cent. Following the decision, Lib Dem economic spokesman Vince Cable said it was “obvious” the Bank would […]

Brown ‘cannot avoid blame’ for house price crash

Gordon Brown will not be able to avoid the political fallout from a house-price cash, the Liberal Democrats claimed today. Vince Cable, Lib Dem acting leader and economics spokesman, warned a housing market crash has become a real possibility in the UK, as the country prepares to feel the effects of the transatlantic credit crunch. […]

King warns of “uncomfortable” economic outlook

Britain’s economic outlook is “uncomfortable”, the governor of the Bank of England has said. Giving evidence to MPs, Mervyn King predicted economic growth will slow and inflation is likely to rise in the medium-term. He blamed the global credit crunch, combined with rising energy and food prices, for increasing inflationary pressures. Giving evidence on the […]

Brown urged to address personal debt

The Liberal Democrats have increased the pressure on the government to address rising levels of personal debt. The renewed focus on personal borrowing came as the Bank of England raised the base rate to 5.75 per cent. This represents the fifth interest rate hike of the past year and brings the cost of borrowing to […]

Inflation rises to ten-year high

The cost of living has risen by three per cent, the highest level since records began ten years ago, new figures from the Office for National Statistics (ONS) show. The increase in consumer price index (CPI) inflation has been largely driven by higher fuel costs, partly due to the chancellor’s fuel duty hike on December […]

Bank of England ups interest rates to 5.25%

Interest rates rose to 5.25 per cent today, after the Bank of England took action to lower inflation. The increase surprised the majority of economists and left rates at their highest level since April 2001. It is the third increase since August. The Bank’s interest rate setting monetary policy committee (MPC) raises and lowers the […]

Treasury forecasts could hit interest rates

The Treasury’s economic forecasts could be partly responsible for interest rates rising, the Lords’ economic affairs committee has said. Looking at monetary policy over the last year – during which interest rates have risen twice – the committee expressed concern “over-optimistic” growth forecasts might affect interest rates. In 1997 the Labour party handed over responsibility […]