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08/01/2009
Interest Rates Reach All-Time Low Of 1.5%
The Bank of England has cut interest rates to 1.5%, as it is rumoured the Chancellor is considering printing more money in an attempt to alleviate the pressures of the credit crunch.
The Bank's Monetary Policy announced the cut of 0.5 percentage point, taking it to its lowest level in its 315-year history.
The Monetary Policy Committee's two-day meeting began yesterday, to examine interest rates, on the same day retail giant Marks & Spencer announced over 1,200 job cuts, and fashion company Viyella went into administration, putting 450 jobs at risk.
Explaining its decision, the Bank said the level of contraction in business activity had "increased during the fourth quarter of 2008, and that output is likely to continue to fall sharply during the first part of this year".
"Surveys of retailers and reports from the Bank's regional agents imply that consumer spending has weakened.
"The outlook for business and residential investment has deteriorated. And the availability of credit to both households and businesses has tightened further, pointing to the need for further measures to increase the flow of lending to the non-financial sector.
"But the substantial depreciation in sterling over recent months may help to moderate the impact on UK net exports of the slowdown in global growth," she said
Hetal Mehta, a senior economic advisor to the Ernst & Young ITEM Club, said the bank was facing a "balancing act".
She added that the cut to 1.5% was "appropriate", but said the Bank should not stop there.
"With survey data continuing to languish at record lows - manufacturing and services surveys in the past few days have confirmed that activity is falling sharply - we see no reason for the Bank to hold back in cutting interest rates to 1% or below in the coming months," she said.
A central bank printing money to inject into the markets - known as quantitative easing - was pioneered by Japan in the 1990s as a way of battling its deflationary problems.
Alistair Darling suggested this week that if the policy were adopted it would be done with the Treasury and Bank of England working "hand in hand, because the two responsibilities just become so close you would have to operate together".
The Government, however, has denied newspaper reports it is considering printing more money.
Treasury sources have said that while the move has not been ruled out, it is not currently on the agenda.
(JM/BMcC)
The Bank's Monetary Policy announced the cut of 0.5 percentage point, taking it to its lowest level in its 315-year history.
The Monetary Policy Committee's two-day meeting began yesterday, to examine interest rates, on the same day retail giant Marks & Spencer announced over 1,200 job cuts, and fashion company Viyella went into administration, putting 450 jobs at risk.
Explaining its decision, the Bank said the level of contraction in business activity had "increased during the fourth quarter of 2008, and that output is likely to continue to fall sharply during the first part of this year".
"Surveys of retailers and reports from the Bank's regional agents imply that consumer spending has weakened.
"The outlook for business and residential investment has deteriorated. And the availability of credit to both households and businesses has tightened further, pointing to the need for further measures to increase the flow of lending to the non-financial sector.
"But the substantial depreciation in sterling over recent months may help to moderate the impact on UK net exports of the slowdown in global growth," she said
Hetal Mehta, a senior economic advisor to the Ernst & Young ITEM Club, said the bank was facing a "balancing act".
She added that the cut to 1.5% was "appropriate", but said the Bank should not stop there.
"With survey data continuing to languish at record lows - manufacturing and services surveys in the past few days have confirmed that activity is falling sharply - we see no reason for the Bank to hold back in cutting interest rates to 1% or below in the coming months," she said.
A central bank printing money to inject into the markets - known as quantitative easing - was pioneered by Japan in the 1990s as a way of battling its deflationary problems.
Alistair Darling suggested this week that if the policy were adopted it would be done with the Treasury and Bank of England working "hand in hand, because the two responsibilities just become so close you would have to operate together".
The Government, however, has denied newspaper reports it is considering printing more money.
Treasury sources have said that while the move has not been ruled out, it is not currently on the agenda.
(JM/BMcC)
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Bank Of England Slashes Interest Rates To 3%
The Bank of England has reduced interest rates by 1.5% in a dramatic attempt to rescue Britain from the grip of recession. The cut - which takes interest rates to 3% - follows widespread calls from industry for a major reduction, as the country faces the prospect of a deep recession.
10 April 2008
Interest Rates Reduced to 5%
The Bank of England's Monetary Policy Committee have cut interest rates from 5.25% to 5% to stabilise the economy as the global credit crunch reaches UK shores. The British Chambers of Commerce warned that the cut was "no longer sufficient".
Interest Rates Reduced to 5%
The Bank of England's Monetary Policy Committee have cut interest rates from 5.25% to 5% to stabilise the economy as the global credit crunch reaches UK shores. The British Chambers of Commerce warned that the cut was "no longer sufficient".
09 November 2007
Interest Rates On Hold But Cut Likely Soon
Mounting pressure for a cut in the UK's interest rate hasn't produced one yet, but the good news for borrowers is that the Bank of England has at least kept interest rates on hold at 5.75% and indications are that a cut is due next time.
Interest Rates On Hold But Cut Likely Soon
Mounting pressure for a cut in the UK's interest rate hasn't produced one yet, but the good news for borrowers is that the Bank of England has at least kept interest rates on hold at 5.75% and indications are that a cut is due next time.
07 August 2008
Interest Rates Held
The Bank of England has kept interest rates at 5% for the fourth month in a row in a bid to balance slow growth and rising inflation. The Monetary Policy Committee's (MPC) primary goal is to reduce the current inflation rate of 3.8% to the Government target of 2%.
Interest Rates Held
The Bank of England has kept interest rates at 5% for the fourth month in a row in a bid to balance slow growth and rising inflation. The Monetary Policy Committee's (MPC) primary goal is to reduce the current inflation rate of 3.8% to the Government target of 2%.
10 April 2003
Bank of England hold interest rates at 3.75%
The Bank of England's Monetary Policy Committee has today voted to maintain the Bank's rate at 3.75%. There was no accompanying statement from the Bank, but Sterling firmed slightly on the news that the rate was unchanged.
Bank of England hold interest rates at 3.75%
The Bank of England's Monetary Policy Committee has today voted to maintain the Bank's rate at 3.75%. There was no accompanying statement from the Bank, but Sterling firmed slightly on the news that the rate was unchanged.
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