Expert comment: Bank of England drops base interest rate

“The Monetary Policy Committee (MPC) of the Bank of England, with a majority of five to four, just decided to cut the base interest rate by 0.25 points to 5%.

“This seems very much what the market was expecting and hoping for, given the progress on inflation, with the inflation rate being at the 2% target in May and June. This is a necessary cut for boosting the economy, the housing market and consumer confidence.  

“Major banks had already cut their interest rates in anticipation of the decision. However, the Bank of England has also warned that they will not cut rates too much or too quickly, to ensure inflation remains low.”