Base rate reaches 0.5% - buy to let mortgages

06 March 2009

The base rate has been reduced to 0.5 per cent by the Bank of England, taking it to the lowest it has ever been in the history of the financial institution.

A 50 basis point cut was implemented by the Bank's monetary policy committee yesterday following its monthly meeting.

The body stated that the move - which could help to lower the cost of buy to let mortgages - was based upon the "continued" weakened activity seen in international markets.

In addition, the Bank announced that it is to commence quantitative easing, unveiling a £75 billion scheme that will see it making asset purchases to help shore up the economy.

Commenting on the move, Royal Institution of Chartered Surveyors chief economist Simon Rubinsohn said it represents "good news in the face of the relentless stream of poor economic numbers".

He added that it is "vital" for the MPC to focus on "boosting the quantity of money in circulation".