Interest rates cut by 0.25 percentage points

The base rate of interest has been lowered by a quarter of a percentage point by Bank of England’s monetary policy committee (MPC).

In news that may be of interest to those with mortgages or looking to buy a house in Scotland, the MPC elected to reduce the rate to 5.25 per cent.

The financial institution states that global financial market disruption has continued and credit conditions for households in the UK are tightening.

It also suggests that higher energy and food prices are expected to increase inflation and as such it is necessary to return inflation to target levelled in the medium term.

In related news that may also be of interest to those looking to buy a house in Scotland, Abbey’s chief economist stated: "The reduction should help to bolster consumer confidence and support economic activity at a time of continued uncertainty."

The MPC’s previous decision to change the interest rate was a reduction of 0.25 percentage points in December 2007.