Lloyds TSB: MPC rate decision

Trevor Williams, chief economist Lloyds TSB Corporate Markets comments on the MPC decision: "This decision must have been one of the toughest the Monetary Policy Committee (MPC) has faced for a while. It will be fascinating to see just how close the vote was, when the minutes are published later this month.

"If the MPC had kept rates on hold, it would have left the economy exposed to a slowdown. But by cutting rates, it has left inflation free to rise even further beyond its target.

"In the end, it was probably the stream of economic data published in recent days that tipped the balance in favour of a cut. The Bank of England's own report on credit conditions was anything but upbeat, predicting that credit is set to become both scarcer and costlier.

"There are some who believe that rates could fall further still, but the likelihood is that today's cut will be the last we will see this year, unless the economic situation deteriorates further."