Thursday, November 6, 2008

BOE and ECB Cut Rates

Adding more fuel to future inflation, the Bank of England slashed interest rates by 1.5 percentage points to 3 per cent in a wholly-unexpected move on Thursday as it cited “marked deterioration in the outlook for economic activity at home” in the teeth of “the most serious disruption for almost a century” in the global banking system.

Also, the ECB announced it cut its main policy rate by half a percentage point to 3.25 per cent - the lowest level since October 2006.

The cut came less than a month after the ECB lowered its policy rate by half a percentage point to 3.75 per cent as part of a coordinated global move by central banks on October 8.

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