UK Interest Rates Cut by Huge 1.5% Today
In what experts call “the right call”, The Bank of England has reduced interest rates today by another 1.5%, bringing them down to 3%.
This response to the recession is a shocker - it is the most drastic rate cut since the two percentage point reduction of 1981 and the lowest interest rate since 1955, taking the markets by surprise and dropping borrowing costs to their lowest level since 1955.
Director-general of the Confederation of British Industry Richard Lambert, said:
"This is a bold and welcome move by the Monetary Policy Committee, and achieves what the CBI had been calling for...this cut... should help to ease conditions in the credit markets, and allow banks to pass the benefits on to their customers."
The market appears to agree, with the FTSE stock market gaining more than 100 points after the announcement of the rate reduction.
Prime Minister Gordon Brown told the House of Commons on Wednesday, “What we've been trying to do over the last few weeks is get the liquidity into the system, recapitalise our banks and then get them to resume the lending that is necessary.”
Many fear, however, that the savings won’t trickle down to consumers, especially because high street banks are looking to increase their own lending rates to protect their profits. Bastards.