The Bank of England has cut British interest rates by a quarter of a point to 3.75%, reflecting growing concerns over the global economy and recent falls in the stock market.
The rate cut was the first from the bank's Monetary Policy Committee since November 2001, and takes UK borrowing costs to their lowest level since 1955.
Economists had not expected any change in rates today, despite strong recent pressure from UK industry for a cut to shore up confidence amid uncertain economic conditions.
Analysts fear that today's cut in rates could fuel the UK property marketfurther, making the chances of a sharp drop in house prices more likely. Above-target inflation, at 2.7%, and worries about the effect of higher oil prices have also been cited as reasons for keeping rates on hold.
