BoE bid for stability brings rates down to 5%

Economists divided on impact of recent rate cut, citing growing inflationary risk and minimal impact on homeowners as key negative factors

The Bank of England's latest 25 basis point cut took interest rates down to 5% in a bid to stabilise the economy and housing market and reduce the pressure on homeowners. The Monetary Policy Committee (MPC) believes tightening borrowing conditions and the lack of cheap and easily available credit justified the cut. However, it runs the risk of unbalancing inflation and causing the UK to miss its medium-term CPI target of 2%. In a statement, the Bank said it expects inflation to rise further this year in line with food and energy prices. The bank said: "On the upside, above-target in...