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Bank cuts base rate

The Bank of England's monetary policy committee (MPC) has decided to drop interest rates by a quarter point.The move puts the base rate at 5.5 per cent, down from 5.75 per cent, where it had been since the summer.Despite concerns that food and oil inflation have remained high over recent months, the MPC appears to have this time sided with the property market, where analysts had warned of a significant drop in prices had the rate remained at its current level over the coming months.There was also some concern that the higher level of interest rate was stifling the economy as it coincided with the global credit crunch, which has made it difficult for people to obtain credit.By cutting rates now, it is hoped that some consumer spending will be stimulated in the run-up to Christmas.

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