Bank of England 'cuts rates by 50 basis points'

The Bank of England has voted to reduce the official interest rate to 4.5 per cent.

After a special meeting held ahead of schedule, the Bank of England made the move in conjunction with a number of central banks around the world.

According to the statement, numerous central banks have remained "in continuous close consultation and have cooperated in unprecedented joint actions such as the provision of liquidity to reduce strains in financial markets".

Similar moves were made by the Bank of Canada, the European Central Bank, the Federal Reserve, Sveriges Riksbank and the Swiss National Bank as part of a co-ordinated effort to address the financial crisis.

Today's information could be welcome news to mortgage holders with flexible deals or those planning to take up similar loans to purchase a property.

The last time the rate was reduced was a cut of 0.25 percentage points in April 2008 and it represents the first time the central bank has cut rates by more than this figure since November 2001.