The Bank of England cuts interest rates by 0.5 %

The decision brings interest rates to their lowest level for 300 years...

The decision brings interest rates to their lowest level for 300 years.

The Bank’s Monetary Policy Committee has been cutting the Bank Rate in recent months, from 5 per cent at the beginning of October to its current level of just 1 per cent.

Mark O’Sullivan of Currencies Direct commented, The fifty basis point cut, although expected, has provoked a rally in the pound despite the market pricing it in. Brokers expected that this modest improvement would be off set by the maintenance of a 2% rate hold of the ECB, but it appears that rumors of further cuts in the UK have galvanized the pound as speculators are turning back to liquid and available sterling, fearing the effects of holding without lending’ in the Euro zone.’

A positive now is the increasing belief that bricks and mortar are the only way to ensure long term value retention, and with fewer mortgages being approved on the other side of the channel in France, determined buyers have the opportunity to capitalize on a strangulated sellers market.