The Bank of England has cut interest rates to half and begun the process of pumping billions of pounds into Britain's economy.
At noon today the Bank announced that rates are being lowered again to 0.5%, the lowest since the central bank was founded in 1694.
With its rate-cutting ammunition all but exhausted, the Bank pressed the button on a much more drastic policy, quantitative easing - the process of buying up government and corporate debt – in an effort to kick-start the economy.
Reacting to the news, John Phillips, financial services director at Kinleigh Folkard & Hayward said:'Today’s interest rate cut is once again excellent news for tracker mortgage holders, but the outlook is less than favourable for savers, who will now be less inclined than ever to put money into savings accounts. This will hit banks’ profits and make them less likely to lend further.
'As the Bank of England is to try quantitative easing, this should, theoretically, encourage banks and building societies to lend more to their customers, which will in turn encourage spending. However, it remains to be seen whether the creation of new money will have any success.'