Bank of England reduces interest rates

The Bank of England's monetary policy committee (MPC) has today announced its decision to reduce interest rates.

In news which may impact upon the recruitment plans of UK-based companies, the MPC has today decided to reduce interest rates by 0.25 per cent to five per cent.

The decision comes as the Bank has confirmed that the UK economy could face a period of downturn as a consequence of restricted credit conditions, combined with the effects of disruption in financial markets.

"A quarter per cent cut in interest rates seems like welcome respite for the million of households struggling to meet mortgage repayments," said Liberal Democrat treasury spokesman Vince Cable.

"However, the reality is that this will make little, if any, difference for the vast majority of people."

Today's reduction is the third time interest rates have been reduced since December 2007.