Interest Rates Cut .25%

The Bank of England cut interest rates by 0.25%, down to 5.25%, saying it was needed given the expected sharp rise in inflation over the next few months due to increased food and fuel costs.

Experts had called for a 0.5% cut, but the Bank of England held it's nerve with just a quarter of a percent drop to help homeowners. Within an hour of the announcement, 9 of the top 10 lenders had said they would pass on the cut to their customers. Only Northern Rock did not offer to cut rates for it's customers.