The Bank of England has reduced interest rates to 1.00% in an effort to boost lending and encourage consumption in the UK. The Central Bank cut 50 basis points to a record low after the UK had entered into a recession. The rate was 5.00% back in October and in an aggressive stance by the BoE has been reduced to stem the shrinking of the UK’s economy.
European Central Bank
ECB President Jean – Claude Trichet declared that the Central Bank will not reduce rates to zero at this state, after informing the press that the Bank would keep the rate at 2.00%. This caused the Euro to drop to a two month low versus the USD. Analysts expected a 50 basis point, and Trichet has remarked that the ECB might cut rates to the 1.5% level in the Bank’s meeting in March.
