Bank goes to 0.5%, starts quantitative easing

Date: 5th March 2009

The Bank of England has slashed the base rate to a historic 0.5 per cent and vowed to start quantitative easing.

Following today's (March 5th) decision to cut 50 basis points from the base, Bank officials announced plans to buy £75 billion of gilts and assets through the printing of new notes.

The Bank said in a statement: "World activity continued to weaken, reflecting both depressed confidence and the persistent problems in international credit markets.

"The [monetary policy] committee also resolved to undertake further monetary actions, with the aim of boosting the supply of money and credit."

It added that the process of purchasing assets could "take up to three months", but could help to meet the medium-term inflation target.

The Bank's last change in the base rate was a reduction of half a percentage point to one per cent on February 5th.