BOE announces record 3% base rate

The Bank of England has unveiled a 1.5% interest rate cut in a bid to derail the oncoming recession.

In a shock move, the Bank's monetary policy committee (MPC) today (6 November) announced a reduction in the lending rate to 3%.

Prior to the decision, Prime Minister Gordon Brown had urged the banking sector to pass on any rate decrease to mortgage holders and small businesses.

During a House of Commons debate yesterday, the Prime Minister said: "We want the banks and building societies to pass on the interest rate cuts to their mortgage holders."

He added that over the last few weeks the government had been trying to inject liquidity into the financial sector, recapitalise banks and get them to resume lending.

Earlier this week, the Federation of Small Businesses said it was anticipating a rate cut of 100 basis points.