Recession tracker: Interest rates

The Bank of England has decided to leave interest rates unchanged at 0.5% for the sixth month in a row.

FALLING RATES

• 8 October 2008: 4.5%
• 6 November 2008: 3.0%
• 4 December 2008: 2.0%
• 8 January 2009: 1.5%
• 5 February 2009: 1.0%
• 5 March 2009: 0.5%

This period of stable rates follows a sharp downward trend that began during the second half of last year as the financial crisis broke.

Cutting interest rates is one of the main tools available to the Bank as it attempts to boost the UK's economy in the face of a serious global recession.

By March 2009 rates had finally hit such a low level that cutting them any futher would have been ineffective.

Rates had been as high as 5.0% as recently as the first week of October 2008.

But when sharp cuts in the cost of borrowing did not lead to an increase in lending to businesses and individuals, other measures had to be considered to kick-start the economy.

The bank has said it will continue with its £175bn quantitative easing programme, which aims to increase the amount of money in the UK's financial system in an attempt to boost bank lending - but that it would not extend the programme.

Recent data has suggested that the UK has begun to climb out of recession.

Figures used in chart above, Bank Rate 1694-1972, Min Lending Rate 1972-1981, Min Band 1 Dealing Rate 1981-1996, Repo Rate 1997-2005, Official Bank Rate, 2006 onwards

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