The Bank of England cut its key interest rate by a quarter of a point on Thursday to 5.00 percent, balancing the risks of rising near-term inflation and economic slowdown spread by the credit crisis. The decision, which was in line with market expectations, took short-term borrowing costs to the lowest level since January 2007 and came amid growing concerns over the country's slowing housing market. The BoE said in a statement that its rate-setting Monetary Policy Committee had decided that the economy would probably experience a slowing of growth because of the global credit squeeze. Shortly afterwards, the European Central Bank opted to keep its key eurozone short-term interest rate at the current level of 4.00 percent. In contrast, the US Federal Reserve has lopped three percentage points off short-term US borrowing costs since September to shore up its troubled economy. British inflation rose to 2.5 percent over the 12 months to February. __
