Bank of England cuts Base Rate by 25 basis points (AP)  (10-04-2008)

LONDON (AP) -- In a widely expected move, the Bank of England cut its base lending rate by a quarter-point to 5 percent on Thursday, in an attempt to stimulate growth.

The bank's key rate was 5.75 percent in July and held there until December. The last time the rate was as low as 5 percent was November 2006.

Bank Governor Mervyn King told a legislative committee last month that a rate cut was probably needed to bolster consumer confidence, and he said he expected inflation to go as high as 3 percent before retreating.

Inflation rose to 2.5 percent in the year through February, above the government's 2 percent target. A cut in rates could boost economic growth, but also runs the risk of pushing inflation higher.

This week's downbeat economic news included a report that U.K. house prices fell 2.5 percent in March, though they remain above year-ago levels, and Wednesday's report from the Nationwide Bank that consumer confidence had fallen to the lowest level since its monthly survey began four years ago.

Source AP