Interest rates cut to 300-year low of 2%

Monetary policymakers are attempting to prevent a harsh economic downturn as inflationary fears ease. The 1% cut follows November's shock 1.5% reduction, which some market analysts saw as an admission the economy is in a far worse state than the Government claims. Rates were last at 2% in 1951, when Britain's economy was still recovering from the devastation of the Second World War. UK base rates have never fallen below 2% in the Bank of England's 314-year history, but economist expect further cuts in 2009, and the possibility of 0% interest rates is becoming increasingly likely. Th...