When would a reduction in the base rate of interest by the MPC be appropriate, and why?

A reduction in the base rate of interest means that the cost of borrowing money is cheaper and the reward for saving money is lower. Therefore, people are more likely to borrow money from banks and this leads on to more spending and investment in the economy, and this increases aggregate demand in the economy leading to economic growth. Therefore, a good time to implement this policy would be during a recession which is a period of economic decline in at least two successive quarters. It would allow economic growth to rise, and to take the economy out of a recession by the increase in aggregate demand. An example of this is when the base rate fell to 0.5% in 2009 during the financial crisis.