Interest rates plunge to record low

In its third sitting of the year on Tuesday, the Monetary Policy Committee (MPC) decided to cut the benchmark bank rate by 50 basis points to 8.5 percent saying the current state of the economy, which is characterised by output growing below potential and high unemployment, provides an opportunity for non-inflationary stimulus to the economy. The central bank cut the bank rate by the same margin last month after a 30-month freeze.

"Assumptions on both the domestic and external economic outlook, as well as the inflation forecast, suggest that a more accommodative monetary policy stance is consistent with the achievement of the bank's 3- 6 percent inflation objective in the medium term.