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UPDATE 1-JPMorgan lowers benchmark interest rate following Fed rate cut

Elizabeth Dilts

(Adds information about Federal Reserve decision, history of bank's prime rates)

NEW YORK, July 31 (Reuters) - JPMorgan Chase & Co, the largest U.S. bank by assets, lowered its prime rate for the first time in more than a decade on Wednesday, following a rate cut from the Federal Reserve.

The prime rate is a benchmark for a wide range of consumer and commercial loans.

Starting Aug. 1, the bank said its prime rate will fall by 25 basis points to 5.25%.

The U.S. Federal Reserve cut its overnight lending rate to a target range of 2.00% to 2.25%, citing concerns about the global economy and muted U.S. inflation. The U.S. central bank signaled a readiness to lower borrowing costs further if needed.

The last time JPMorgan reduced its prime rate was December 2008, when it cut the rate to 3.25% from 4%. The bank maintained a 3.25% prime lending rate for the next seven years, eventually raising it to 3.5% in December 2015.

A lower prime rate will translate into lower interest rates on a wide range of JPMorgan's loans that are based off the Fed's main short-term rate, and could result in a drag on bank earnings in the coming quarters. (Reporting by Elizabeth Dilts; Editing by Steve Orlofsky and Leslie Adler)