The base interest rate used to calculate mortgage premiums has been cut by 0.25% following a meeting of the Bank of England’s Monetary Policy Committee (pictured, below).
It has decided to take the ‘breaks off the economy’ following a month that has seen the UK battered by internal and external financial and economic events.
Members of the committee voted five against four in favour of the cut, saying that reducing its Bank Rate to 4% would help an economy that has seen growth “subdued, consistent with a continued, gradual loosening of the labour market”.
“A margin of slack is judged to have emerged in the economy. Downside domestic and geopolitical risks around economic activity remain, although trade policy uncertainty has diminished somewhat.
“A gradual and careful approach to the further withdrawal of monetary policy restraint remains appropriate.
“The restrictiveness of monetary policy has fallen as Bank Rate has been reduced.
“The timing and pace of future reductions in the restrictiveness of policy will depend on the extent to which underlying disinflationary pressures continue to ease. Monetary policy is not on a pre-set path, and the Committee will remain responsive to the accumulation of evidence.”
Its next decision will be on the 18th of September.
