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The Bank of England has just announced that interest rates have been cut by 0.5% to 1.5%.

As the BBC points out, this is the lowest level in the Bank’s 315 year history.

No press release has been sent out by CCHQ, but PoliticsHome records shadow chancellor George Osborne’s reaction as follows:

Mr
Osborne said [on Sky News] the cut in interest rates to 1.5% was necessary, but urged
the government to take up the Conservative plans for a National Loan
Guarantee Scheme and to provide tax relief for basic rate savers and
pensioners.

“The cuts in rates are necessary, but the government
should be helping the victims, and that means tax relief for savers and
pensioners.

“If we don’t get banks lending to businesses again
more and more people are going to lose their jobs. The government’s
policies aren’t working – we need action now."

Asked about the
reluctance of banks to lend he said, “we want them to lend responsibly
but at the moment there’s an absence of lending even responsibly. There
are perfectly good companies who aren’t getting credit. It is a credit
crunch. It is why we need a National Loan Guarantee scheme. It is not
just good for businesses, it’s good for the people in the country as it
keeps people in their jobs.

“A weak currency means a weak
economy and a weak government. Despite all the promises of the
government the British economy is more exposed to recession than
others.”

Speaking shortly afterwards [on BBC News] Mr Osborne added that the country needs to be moved away from “an addiction to debt”.

Of
the interest rate cut he said, “I think it’s the right move, but the
essential thing now is the cuts are passed on. The issue here is not
just the cost of money, but the availability of money.

“None of Gordon Brown’s policies are working – the recession is getting deeper.

“We also need to move this country away from an addiction to debt.

“It
is certainly the case that there is a global dimension to this, that’s
stating the obvious, but you then have to ask yourself why Britain is
so deeply effected.”

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