Bank of England cuts rate by 150 basis points

06 November 2008 12:02  [Source: ICIS news]

LONDON (ICIS news)--The Bank of England on Thursday cut interest rates by 150 basis points to 3% amid fears the financial crisis is dragging the UK into a recession.   

 

The move comes after economic data showed the British service sector shrank at record pace, factory output posted its longest decline since the recession in 1980 and last month house prices fell at the fastest rate since 1991.

 

The UK is widely forecast to be the worst performer of the world’s largest economies next year, with the European Commission forecasting a 1% decline.

 

In early October the Bank of England, along with the European Central Bank and US Federal Reserve, all lowered interest rates by half a percentage point in an attempt to curb a meltdown on global stocks.

 

Last, the US Federal Reserve Board dropped its key federal funds interest rate by a further 50 basis points to 1%, citing the continuing economic downturn in the US and abroad.

 

Bookmark Paul Hodges’ Chemicals and the Economy blog for some independent thinking on the subject

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Author: Mark Watts
+44 20 8652 3214

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