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Surprise cut in interest rates

Friday 19 January 1996 00:02 GMT
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The Chancellor, Kenneth Clarke, came to the rescue of a beleaguered John Major with a cut in interest rates that caught the City napping. The quarter point reduction to 6.25 per cent pushed rates down to their lowest for more than a year, but failed to trigger further cuts in mortgage rates.

The stock market leapt on the news, with the FTSE index of 100 top companies jumping by 44.5 points to a record high of 3,748.7. The City is now betting on a further quarter point cut by March.

Footsie record, page 20

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