The Bank of England's base rate has been lowered to one percent, a move widely predicted by analysts.
The Bank of England's monetary policy committee (MPC) has taken a further step to try to improve the UK's economy by lowering the base rate to one percent.
It is the fifth month in a row that the base rate has been cut, since October's value of five percent. In January, it was set to 1.5 percent - its lowest-ever figure.
The MPC's aim in reducing the rate is to try to increase lending by the country's banks. It will mean that people with mortgages will pay less interest - assuming the lender in question passes on the cut - theoretically allowing more people to get mortgages, as well as freeing up capital for those who already have one.
However, not everyone agreed that a further cut was necessary. Speaking earlier this week, Adrian Coles, the director general of the Building Societies Association (BSA), said that a reduction would hit people with savings accounts, as well as first-time buyers.
The Federation of Small Businesses (FSB) also warned yesterday that the reduction would do nothing to help the economy. A poll of its members found that nearly two thirds did not want the rate to change.
FSB national chairman John Wright commented: "The concern now is that if rates are cut any further there may not be too much more room for manoeuvre in the economy. The onus is really on the banks to start promoting these lower rates to fire up the economy."
