Surprise interest rate cut

Amanda Jarvis

February 6, 2003

The move comes after 14 months of rates staying the same. Most City analysts thought that the Bank would maintain rates at 4.0% to keep a lid on the housing market and general inflation.

But the Bank warned of a gloomier economic outlook. “Over the next two years, the prospects for demand, both globally and domestically, are somewhat weaker than previously anticipated,” a Bank statement said. The cut would help keep inflation “on track”, today's statement added.

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