The Bank of England's Monetary Policy Committee today voted to cut the Bank base rate by 0.25 per cent to 3.75 per cent from 4 per cent.
This the first change in the rate following a status quo of 14 months.
The MPC says it reviewed monetary and economic developments in the light of its latest quarterly projections for output and inflation to be published next month.
Over the next two years, the prospects for demand, both globally and domestically, are somewhat weaker than previously anticipated.
In order to keep inflation on track to meet the target over the medium term, the committee judged it necessary to reduce interest rates by 0.25 per cent.