UK Interest Rates hit an all time low of 1.00%

As expected, the Bank of England’s Monetary Policy Committee today reduced the official Bank Rate paid on commercial bank reserves by another 50 basis points to just 1.00%. This brings the total easing since October, when Bank Rate stood at 5.00%, to 400 basis points. As the chart shows this is the most aggressive easing of monetary policy since 1992 when, in the aftermath of sterling’s exit from the Exchange Rate Mechanism, official rates were slashed from 10% in September (with a one day spike up to 12%) to 6% by January.