Bank rate likely to fall to 0.5%

INTEREST rates are likely to be slashed again this week as the Bank of England embarks on a bid to revive the economy with newly-created money.

Economists expect borrowing costs will hit a record low of 0.5 per cent on Thursday as rates fall for a sixth month in a row.

But a formal vote to begin so-called "quantitative easing" – effectively printing money – is also likely following the Monetary Policy Committee's (MPC) two-day meeting.

Bank governor Mervyn King has written to the Chancellor to ask permission to begin quantitative easing. The MPC will press on with the strategy as soon as Mr Darling gives the go-ahead.