Bank of England cuts interest rate to 2% from 3%

04 December 2008 12:00  [Source: ICIS news]

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LONDON (ICIS news)--The Bank of England on Thursday cut UK interest rates by a whole percentage point to 2%, equalling the lowest level in the bank's history.

The move was aimed at preventing Britain from falling into a prolonged recession amid rapidly declining global economic conditions.

The UK is widely forecast to be the worst performer of the world’s largest economies next year, with many economists forecasting a GDP decline of at least 1%.

Last month, the Bank of England cut interest rates by one and a half points to 3%, but this failed to revive lending to businesses and homeowners.

British retailers have slashed prices in an attempt to attract customers, as consumer confidence continues to drop amid rising unemployment levels.

Earlier on Thursday Sweden’s Riksbank lowered its key rate by 1.75 percentage points to 2%, its largest cut in rates since 1992.

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By: Mark Watts
+44 20 8652 3214

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