The Bank of England cut interest rates today. This in itself was not unexpected as market watchers were predicting, on average, a reduction of half a percent. This was based mostly on the fact that the Bank’s Monetary Policy Committee had never before approved a reduction greater than fifty basis points.

Yesterday, I wrote that maybe it is time for the Bank to make a little history and to provide England’s battered economy with greater relief - maybe even a full percent cut.

It seems that the Bank is listening and history was indeed made as the Monetary Policy Committee has slashed rates by a percent and a half. This is a full 150 basis points, bringing the benchmark lending rate to 3 percent; it’s lowest since 1955.

Now, let’s see what the European Central Bank has in store for us as a rate cut is expected from the eurozone countries as well.

Filed under: FXCommentary