A 0.25% reduction in interest rates is widely regarded by many in the city as the smallest amount possible, but is it?

We did a quick survey of city experts in the bar at lunchtime and had a bit of a shock, oooh missus.

Gary Garibold of Credit Suzie International Arbitrage'n' Stuff: "As you know, we in the city always say it's a 25 basis points reduction when it's a 0.25% rate reduction. So you might reasonably expect that the smallest rate reduction is therefore a 1 basis point reduction or 0.01%. Such a small reduction is ridiculous in practice, and so you might reasonably argue that we are simply being pretentious pricks for saying the basis points thingie. I couldn't possibly comment, but if they want to pay me £345,000 a year for saying it I'll say it their way."

Harry Baggit, Guardian Index Linkers Ltd: "Theoretically there is no minimum to the amount the Bank of England could reduce interest rates, so in theory it could be a reduction of a millionth of one percent, or even ten millionths of one percent. If that were ever to happen I think that there would be disquiet in the city and an awful lot of alcohol consumed, but if it ever got that bad I'm sure the Bank of England would jump in to pay the bar bill."

Burt Smith, Smith Russian Equity Trust: "Anything under a 1% reduction is ridiculous. Why bother? They've got the right idea in the States, 3/4 rate fall. That's not a 1% fall, but there's only a quarter point in it. Can I charge this bar bill to my expense account? Christ where's the little boys room?"