Small businesses applaud historic UK interest rate cut

UK interest rates have been cut again by the Bank of England which slashed away another 1% to take its base rate to a 57 year record low of 2%.

It’s generally acknowledged that this decisive action was necessary and that further cuts in interest rates are highly likely, perhaps even taking the rate to zero early in 2009.

Various groups representing business welcomed the Bank of England’s action.

The Federation of Small Businesses welcomed the news while keeping the pressure up on banks to pass on the rate cut to SMEs:

The burden is now on the banks to pass this cut on to their customers. This cut will provide a welcome piece of mistletoe to give a kiss of life to the economy when it needs it most.

Meanwhile the Chartered Institute of Personnel and Development (CIPD) also praised the move, but was concerned that options are becoming more and more limited.

CIPD, chief economist, John Philpott, said:

With bank rates at an historic low we are clearly entering uncharted economic waters. The MPC has wisely left room for further cuts but there aren’t now many throws of the monetary dice left.

[Picture credit: {dpade1337} licenced from Flickr]