Britain's Central Bank Slashes Lending Rates By 1 Percent, Benchmark Now Lowest In 57 Years

December 4, 2008 10:53 a.m. EST

London, England (AHN) - True to expectations, the Bank of England again reduced key lending rates by 1 percent, bring it down to only 2 percent, the lowest in 57 years.

It is the third reduction made by the British central bank since October in an attempt to move the country out of recession.

HSBC and the Halifax said the benchmark interest rate slash would be passed on to their borrowers, but the Royal Bank of Scotland said it would pass it on at a later date as it seeks to achieve a balance between the interest of savers and borrowers.

Economists and other sectors welcomed the move, which would reduce interest on mortgage loans of a borrower with a $293,440 (200,000 pound) tracker-rate repayment mortgage by over $147 (100 pound) monthly.

The Bank of England rate cut comes on the heels of similar benchmark lending rate reductions made by the central banks of Thailand, Sweden and the European Union.