News Article - 22 May 2012
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The Bank of England's monetary policy committee (MPC) has cut the base rate by a quarter-point to 5.25 per cent today.

In a statement, the Bank claimed that prospects for foreign business growth have deteriorated, causing continuing instability in financial markets around the world.

Alongside lowered levels of consumer spending, household and business plans to control costs had led the committee to think that the current economic slowdown is likely to continue.

"These developments pose downside risks to the outlook for inflation," it stated, adding that the cut "was necessary to meet the two per cent target for CPI [consumer price index] inflation in the medium term".

In the face of a looming recession, the MPC last cut rates by 25 basis points in December after examining business productivity, house prices and spending.

Prime Minister Gordon Brown recently announced that a complete UK economic recession would not happen as the government would take whatever steps were necessary to maintain stability.

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