The Bank of England’s monetary policy committee (MPC) has elected to reduce the rate of interest by 0.25 percentage points to 5.5 per cent.
Signs that growth in the market is beginning to slow and forward-looking surveys of households and businesses suggesting that spending is moderating led the committee to decide that a cut was the best move to make.
Commenting on the results, Nici Audhlam-Gardiner, head of mortgages at Abbey, states that the reduction reflects some warning signs of a slowing economy and, in particular, the drop in activity noted in the housing market in recent weeks.
"The rate cut will be a welcome start to 2008 providing relief for house-buyers and remortgagers as it eases the pressure on monthly mortgage payments," she said.
The previous change in rate was an increase of 0.25 percentage points to 5.75 per cent on July 5th this year, the last of five rises since August 2006.