Low inflation gives room for a cut now without damaging stability.
As homeowners and manufacturing industry celebrate the first interest rate cut in 20 months, ITN looks at the implications for the average family. The Monetary Policy Committee at the Bank of England meets every month to determine whether the time is right to vary interest rates. It is always a delicate balancing act. On the one hand, low interest rates give consumers more money to spend, which fuels inflation. On the other hand, manufacturing industry needs cheap borrowing to fuel investment and favourable exchange rates to boost exports.