Base rate slashed to 3%

The Bank of England has slashed interest rates by 150 basis points as it calls the recent banking cri...

Base rates in the UK now stand at 3%.

A statement said: “Since mid-September, the global banking system has experienced its most serious disruption for almost a century. While the measures taken on bank capital, funding and liquidity in several countries, including our own, have begun to ease the situation, the availability of credit to households and businesses is likely to remain restricted for some time.”

The MPC said the deterioration in the economy and commodity price falls has caused the committee to revise down its inflation outlook and it believes that prevailing market interest rates contain a substantial risk of undershooting the inflation target.

It also said other factors such as a falter in consumer spending, global stockmarket declines, weaker business investment also helped with the decision.