The Bank of England today cut interest rates from 1 per cent to 0.5 per cent.
Charles Stanley chief economist Edward Menashy said it is likely to be the last reduction in interest rates of the current cycle by the Monetary Policy Committee.
There has been a dramatic decline from the peak of when base rates were last raised to 5.75 per cent on 5 July 2007 down to the current level of only 0.5 per cent.
Mr Menashy said: “The MPC has for some time been giving signals that it will use unconventional methods of easing credit.
“Having sharply revised downwards its GDP and inflation estimates, and with reduced interest rates proving ineffective, the MPC has decided to go down the path of quantitative easing.”
“Given the reconstruction already undertaken in the banking sector regarding recapitalisation, the ring-fencing of toxic assets and the insuring of other debt, this combined with quantitative easing should give the UK an excellent chance of overcoming the credit crunch.
“The last chain in the jigsaw remains; will the consumer want to borrow.”