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Bank of England cuts rates

The Bank of England's lending rate was cut by 100 basis points from three per cent to two per cent today.Deteriorating economic conditions have led the Bank to reduce the rate in each of the last three months.This is because interest rate cuts generally make loans cheaper for customers, as they are passed on by loans firms.However Michael Coogan, director general of the Council of Mortgage Lenders, suggested that this might not be the case for all providers in the current financial climate.He said: "Lenders want to help their borrowers, both those who are in difficulty and those who are not. "The practicalities are complex, and lenders are trying to achieve a range of potentially conflicting objectives at the same time."The Bank's rate cut follows reductions in October and November of 50 and 150 basis points respectively.At two per cent, the lending rate is at its lowest level since 1951.

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