Unanimous vote for further UK rate cuts

The Bank of England policymakers have voted 9-0 towards cutting interest rates by a further 1.5 percent.

The Bank has calculated that interest rates can be cut to 2.5 percent and this may be needed if inflation is needed to be stopped falling below its target for 2009. However it seems as though the rate setters are currently still to decide whether such a big cut will be too sudden a move.

The minutes of the November meeting revealed that the Monetary Policy Committee (MPC) would use the future meetings to reassess the economic developments and the reaction of the markets of the rate cuts that have already been made to stabilise inflation.

The inflation report released prior to the publication of the MPC minutes indicated that the projections signal the need for a 2 percent rate to meet medium to long term inflationary targets.

With consumer prices down by 4.5 percent last month and the Bank of England statement from Mervyn King, it should be no surprise that further interest cuts are looming.

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