Bank cites worse credit conditions

LONDON (Reuters) - The Bank of England cut interest rates on Thursday because it was concerned about tightening credit conditions and a deteriorating outlook for economic growth overseas, despite rising inflation.

"Credit conditions have tightened and the availability of credit appears to be worsening. While the recent depreciation in sterling will support net exports, the prospects for output growth abroad have deteriorated," the bank said in a statement.

"This should help keep domestic inflationary pressure in check in the medium term."

The Bank also said there was a risk disruption in financial markets could lead to a slowdown in the economy that was sharp enough to drag inflation below the 2.0 percent target.