UK reduces interest rates to 1%

The Bank of England has reduced interest rates to a record low of 1% from 1.5% in an attempt to boost the shrinking economy.

This marks the fifth interest rate cut since October, as the Bank seeks to encourage more lending.

However, there are concerns that savers will be hurt by lower interest rates.

And business groups argue that this rate cut will not be enough to ease the economic crisis, and will not encourage banks to lend.

The decision comes after official data showed the UK had entered a recession in December, after two successive quarters of economic contraction.

The Bank Rate has now been reduced from 5% in October last year.

Will it help..mmm not sure, probably, but the investors are certainly going to suffer...

Maybe people will start tio buy property rather than leave the money in the back not earning anything, that will help the house market and in tur other business.

The aim is to get people spending so it may work or at least help a little.

I think though that government should insist that part of the deal to bale out the banks should include an insistance that those on fixed rate mortgaged should be allowed to change with reduced penalties or at lease get a reduction, and those on tracker mortgages with a cap of 3-4% should have the cap removed.

ah well there goes my little bit of bank interest .one good thing the taxman won't get much out of my interest now.

Pensioner, saver or on the dole - who is the poorest of us all???

(with apologies :x )