Cut base rate now, report urges

The Bank of England's monetary policy committee (MPC) should cut the base rate urgently, a new report has urged.

A reduction in the rate has been called for by the British Chambers of Commerce (BCC), warning of a likely recession and high unemployment if there isn't a reduction in the base rate soon.

The BCC contended that this threat is greater and more long-term than inflation.

BCC director general David Frost said: "The longer the MPC waits before cutting rates, the bigger the danger that the economic situation would deteriorate."

Such a move could help lower mortgage rates, but recently the MPC has been reluctant to change the base rate, holding it in each of its last four meetings.

Those who self build their homes may be able to save money without a rate cut to lower mortgage costs.

Minutes of the August meeting of the MPC will be published on August 20th, with the next meeting scheduled for September 4th.