FXstreet.com (Barcelona) - The Bank of England has affirmed that its decision to cut its Bank Rate by 1,50% announced in November the 6th was approved unanimously, based on the need to react against the impact of the credit crisis through a substantial monetary loosening, according to the minutes of the meeting.

Upside risks to inflation have diminished sharply in recent weeks, as commodity prices fell, which provided a larger margin for action to the Monetary Policy Committee; the "Inflation Report" had already implied that the Bank Rate was to high -possibly in the excess of 200 basis points- to meet the inflation target in the medium term.

Inflation has started to withdraw from levels above 5% year on year, and the Bank expects CPI to fall to levels around 2% in the medium term.

The prospects on economic growth are "unusually uncertain", according to the BoE, reflecting the exceptional economic and financial factors affecting the outlook.

The Bank affirms that global economic conditions have deteriorated further, and economic activity indicators point out to a further slowdown for the last quarter of 2008, while growth projections for the 2009 have been downwardly revised by analysts.

Money and credit conditions have tightened extremely, the twelve month growth rate of real broad money in the United Kingdom has fallen to levels close to zero, the lowest growing rate since 1980. These tightening and the squeeze on real income growth have produced a considerable reduction in consumer spending.