This is the largest cut since the Bank gained independence in 1997 – and the lowest UK interest rates have been in over half a century.
It is a clear signal of intent to help stimulate the economy.
What’s more, it could be just the news car dealers need. Consumer confidence is low, with buyers holding off on big purchases such as cars due to the lack of certainty in the market.
The Bank’s move aims to stimulate confidence and reassure buyers – as well as making finance easier and cheaper to access.
However, to be of any use, banks must pass on the cut, warns RMIF director, Sue Robinson.
‘The Bank of England’s decision to slash the interest rate is positive news for consumers and business, but it is vital that the saving is passed on, to restore confidence in the marketplace.
‘Consumers and business will feel more confident in the economy once they feel the effect of a lower cost of borrowing.’
Even so, it is a momentous day indeed, particularly on the back of those doom-laden October figures. Could we have reached the nadir, with the recovery just around the corner?
By RICHARD AUCOCK