Interest rate cut "virtually meaningless"

News Article - 24 May 2012
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Businesses looking at ways to control costs and increase productivity during the recession have been advised by one sector commentator that last week's interest rate cut was "virtually meaningless".

Danny Cox, head of advice at Hargreaves Lansdown, said that any further reductions to the Bank of England base rate would be "even more meaningless".

"Going from one per cent to half a per cent is so small it signals that the previous cuts haven't worked properly," he explained, adding that another half a percentage point would not "make a huge amount of difference in the overall scheme of things".

Mr Cox added that he did not believe the Bank's monetary policy committee (MPC) would lower interest rates to zero, but that it could go as low as 0.25 per cent.

Last Thursday (March 5th), the MPC voted to cut the base rate from one per cent to 0.5 per cent - the lowest it has ever been in the Bank of England's history.

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