INSTANT VIEW: BoE cuts interest rates to 1.50 percent

LONDON (Reuters) - The Bank of England cut borrowing costs by 50 basis points to 1.5 percent as expected on Thursday, a record low, amid signs Britain is heading for a deep recession.

Following are reactions from business groups and economists to the decision.

MICHAEL COOGAN, COUNCIL OF MORTGAGE LENDERS

"This cut is a double-edged sword for retail based lenders. While lower mortgage rates provide borrowers with the opportunity to repay their mortgage debt more quickly to reduce the term, lower savings rates impact lenders' ability to attract deposits and maintain the flow of mortgage lending in 2009.

"The market is still not functioning properly and is likely to lead to a fragmented approach by lenders, as they try to balance the interests of savers and borrowers and other pressures on their businesses, in responding to today's announcement."

GEORGE JOHNS, BARCLAYS CAPITAL

"It was as expected, we are not changing our view. We are looking for a 50 basis point cut next month."

"At the moment we expect to mark the trough for rates at 1 percent."

PETER DIXON, COMMERZBANK

"It all looks pretty much in line to me. Obviously the bank is concerned with the implications that the slowdown in global demand is going to have on the UK, but that's not something the bank itself can do much about. The issue of a lack of liquidity in the economy remains an ongoing problem. The fact is we're probably near the trough on rates and we're rapidly reaching the point at which there's not a lot the Bank will be able to do, short of engaging in quantitative easing and that's nothing it can do without specific input from the Treasury."

MATTHEW SHARRATT, BANK OF AMERICA

"It appears that the Bank of England has taken a cautious approach in cutting by 50 basis points. I think it will be slightly disappointing to the market, which had been pricing somewhat more than that, but I think they have quite clearly acknowledged the significant deterioration in the economy.

"But I suspect with data being exceptionally weak and unemployment likely to continue to surge higher in coming months that we haven't seen the last of the rate cuts yet and they are probably going to cut again in February.

"We think that rates will probably bottom out at 0.5 percent by the end of the first quarter."

GEORGE BUCKLEY, DEUTSCHE BANK

"The statement didn't make any specific reference to quantitative easing, confirming what the Chancellor said earlier.