That's a releif then because I can now take my credit card out for a spin...

Austin Tassletine, Bristol, UK

Well they do say that truth is stranger than fiction.

Inflation is above target with sharp rises in energy and food prices.
House price inflation has, up until this year, been rampant and is conveniently not included in inflation calculations.
The BoE has injected billions into the mortgage market to cover up irresponsible lending which has been conveniently unregulated by Messrs Blair and Brown's governments.
And now we have a rate cut to bolster the grossly overinflated property market.
This is a disgrace.

Alan, Inverness,

BIG mistake!

Pedro Tam, london, U.K.

Excellent lower rates. What taxes are going up?

steve, Middlewich, Cheshire

Disappointed but not surprised.
This cut will provide very little if any relief for homeowners - an average of about 15 pounds a month for the small percentage on SVR mortgages. This will be more than offset by the rise in inflation caused by this cut, and we will all have to bear this burden.
The MPC should resign en mass and just leave the decisions to the city and the media, this is effectively what they do anyway.
This paper in particular should be ashamed that it published a piece from a supposedly insightful financial journalist (Kaletsky, yesterday) arguing desperately for a rate cut without once mentioning the 'I' word.

Matt, London,

The sad thing is that the UK is in worse shape than the US and it is amusing to watch the UK media point the finger. If the BoE did not lower rates the UK economy irrespective of what is happening in the world would collapse.

So it is right and they probably have not reduced them enough. But guess what - they have only put off till another day what should have occurred a long time ago. Economic hardship.

We watch and wait to see if the Banks reduce mortgage rates. If they do there has been some agreement done behind closed doors to stop the finger being pointed BOTH WAYS. Everyone smiles. A little more money is printed to fuel the fire and the UK stumbles to the next fence.

Eventually the horse will be so heavy with the Fat Rider (Debt) that it will fall.

The Voters only have themselves to blame for looking the other way.

Paul, London, Canada

I'm surprised at all these negative comments. With the economy slowing sharply, what else where they to do? Hang on until a resession, then the same people would then be moaning about the inaction of the MPC.
Still, some people will moan about everything....

Chris, Northampton, England

Is the BOE really independant? When house price inflation went into were double figures, the BOE did nothing. It watched inflation rise and rise before they finally did something about it. Now there is a sniff of a downturn, they panic. If inflation carries on rising, then we are now in big trouble, there will be no room for manovre and right into a deeper downturn.

Scott Govier, brighton,

Oh that it were so easy to stop a rotten economy from being laid bare by simply cutting interest rates.....

Jon Leigh, Southern, France

People will borrow more money that they will be unable to repay.

Bernard Parke, GUILDFORD,

If the ECB had been deciding the direction of the UK bank rate it would ,at a minimum,have stayed put.
It is truly frightening that the modest fall in UK house prices should have played a major role in triggering the cut. Also,and critically import,the rate decisions are made based on inflation data that is deliberately massaged so as to be kept low. This is extremely misleading and economically extremely dangerous.The average person going to a supermarket for food, paying for heating,running a car, buying clothes,paying council taxes etc etc, knows the money available is going down dramatically in purchasing power.Similarly,pay increases for modest jobs are kept artificially low as are state pensions.
Here in France there is a growingly cynical attitude to government cost of living statistics.People believe,rightly in my view that they are not honestly stated.
I believe this is even more true in the UK.Honesty is in short supply .
whan it comes to inflation statistics.

nic, royan, france

All the vested interest, including Tesco this time around, have pressured the BoE into this move. Rate setting should be taken back under political control - this would be far more honest than pretending that the BoE is independent. It would also give crash gordon and co pause for thought - they presume that keeping deluded house owners happy by maintaining the impression that they are rich because an asset (that they can't sell, if they want somewhere to live) is worth a fortune will win them votes. In reality, after 10 years or more in power there will be plenty of new young voters blaming NuLabour for their inability to ever set foot on the housing ladder.

George, Brighton, UK

This could give a whole new meaning to 'cash for honours'. How does one categorise an 'independent' body which is happy to use the cash of the prudent (savers etc) to prop up the feckless, all in the interests of sucking up to Mr Bean and his powerful business allies? Hopefully Merv and his colleagues on the MPC will have the dignity and self-respect to turn down any offer of 'honours' which might follow their eventual leaving of office.

Graham, Oxford, UK

"The BoE know that they have to protect property growth in the UK - it's value is taken out of the basket of goods used to measure inflation but it's value is the upmost priority when considering rate cuts. "

Pardon?
House prices are MASSIVELY INFLATED.
That price growth does not have to "protected", does not have to be maintained, but needs to reduce - which is why a rate cut is ridiculous and outrageous.

Joe, Manchester,

Perhaps Gareth Jones needs to take an economics class! This is way more complicated than he seems to appreciate, and using words like "locusts" don't help either.

Phil, Southend, Esses

Gareth Jones, Dussedorf asks "Who cares about inflation? Obviously not the BOE."

Exactly, Mr Jones! The inflation rate is only a convenient donkey for the BoE to blindly try to pin the tail on. The whole of Britain has been lauding Brown for making the BoE indpendent but forget 2 important facts:

1. The inflation figures fed to the BoE on which it must base its guess are supplied by whom?

2. Who was it that composed the structure upon which the capital markets are regulated and monitored for aberrations and which has been found to be so wonting at its first test?

Britain has been landed in trouble because G Brown has managed to hoodwink many people (who should have known better that) he has decoupled political influence from the BoE's interest rate.

Brown has abused this misplaced trust by creating a massive property bubble to feed the feel-good factor that has returned Labour to power twice.

Oh, for a true economic and political savant!

Edwin Thornber, Bucharest,

Why not cut interest rates to zero percent? It is obviously the banks aim to pander to the retailers and property investors/locusts. It has demonstrated that it no longer has any concern for inflation, so why not go the whole hog.

Gareth Jones, Dusseldorf, Germany

At least we know now that the BoE is not independent from the government.

jeff, Ayr,

Time to spend my savings on ibvestment properties - nothing eals seems to maytter to the BOE. Who cares about inflation? Obviously not the BOE.

Gareth Jones, Dusseldorf, Germany

THe MPC is not targeted on Property prices - It is targed on inflation and it should not make decisions based on any house price index - The MPC's actions historically have stoked house price inflation by being seen to react when house prices stumble. They are partially to blame for the house price mess that we are in at the moment (i.e dangerously overvalued) and they continue to appear to work in that way - I think they should have left rates alone. Inflation is a serious risk at the moment and people have forgotten what it can do if left unchecked
concerned - London

brendan matthews, kingston upon thames, Surrey

The Bank has been scared into this move. We should all be frit that such statements can be made by an organisation that has access to only half the books, has control of monetary policy but not fiscal. We see shops full of goods and drastic price cutting in a struggle to maintain consumer spending. Against the background of massive consumer debt it looks as though the Bank has decided in favour of the Prime Minster's standing rather than actual market practicalities. The overhead on the market is the mistrust between capital and labour. While the natural marketing stance for Britain is a market free of tariff barriers the Europeans demand a Social Charter, thus condemning growth to being constantly qualified by costly social interventions that are totally against our instincts but play well in the hardened socialist environment that has done little to elevate France although it is a country with all the blessings that nature could bestow. We are in trouble. Slay the EU.

Malcolm Turner, Alsager, England

The nicest Xmas pressent most of us will have this Year.

Happy New Year.

Chris Stylianou

Chris Stylianou, Eastbourne, Sussex

Inflation is out of control and they're CUTTING rates!?! Wage rises cannot meet current inflation!

Concerned , London, UK

The BoE know that they have to protect property growth in the UK - it's value is taken out of the basket of goods used to measure inflation but it's value is the upmost priority when considering rate cuts.

barry dupont, brighton, east sussex