UK Slashes Interest Rates to 3%

The Bank of England has cut interest rates in the UK by one-and-a-half percentage points to 3%, its lowest since 1955, in a shock move to ease leading as the country heads into recession.Following today's decision, the BoE said there had been a very marked deterioration in the outlook for economic activity at home and abroad in the last two months so the cut was warranted.

The latest cut had been highly anticipated, with one member of the MPC, David Blanchflower, publicly stating that the committee needed to be more aggressive in cutting interest rates and must cut them soon

Its hoped that such a bold and decisive move will have have an impact on LIBOR the inter bank lending rate and the money markets will start lending again.