Interest rates cut to 4.75%

The Bank of England has cut interest rates to 4.75%.

Interest rates have been cut by a quarter percent from 5.0% to 4.75% by the Bank of England today, in a move closely watched by both borrowers and savers.

For those with a mortgage, it's likely to result in lower rates, whereas it will likely lead to a reduction in the returns available to savers.

The Bank of England's Monetary Policy Committee (MPC), which meets eight times a year to set rates, cut interest rates from 5.25% to 5% in August, which was the first drop in more than four years following a raft of increases.

Since then, figures have shown that the UK inflation rate dropped unexpectedly to 1.7% in September. This is the lowest rate for over three-and-a-half years and below the 2% target set by the government.

Last month, the Bank of England's Governor, Andrew Bailey, said that it could be a “bit more aggressive” at cutting borrowing costs, depending on the rate of inflation.

Although mortgage rates are much higher than they have been for much of the past decade, with the average two-year fixed mortgage rate at 5.4%, borrowers with tracker and variable mortgages should see an immediate fall in their monthly repayments.

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