« In-Depth Look: Calling the Bottom
Crude Oil = $46 »

Bank of England Slashes Rates 100 Basis Points

Email this post Print this post
By Barry Ritholtz - December 4th, 2008, 7:08AM

The Bank of England cut its benchmark rate by one percentage point to 2% — a level not seen since 1951.

The Bank of England on Thursday slashed its key lending rate by a full percentage point to 2%, the latest in a series of steps taken by policy makers seeking to minimize the depth and length of a potentially long-lasting recession.

The move by the nine-member Monetary Policy Committee follows a decision last month to cut the key lending rate by an unexpectedly large 1.5 percentage points to 3%.

But recent economic confidence data offered no sign that the November move helped buoy activity or sentiment across the manufacturing or services sectors, economists noted.
And other data and events have only served to deepen the gloom surrounding the outlook for the British economy.

The ECB makes their announcement at 7:45am. A half point cut from 3.25% is widely expected.

UPDATE: ECB lowered the benchmark lending rate by 75 basis points to 2.5 percent

>

Sources:
Bank of England slashes key rate
William L. Watts,
MarketWatch 7:03 a.m. EST Dec. 4, 2008
http://tinyurl.com/5t33ql

Bank of England Cuts Key Interest Rate to 2%, Lowest Since 1951
Jennifer Ryan
Bloomberg, Dec. 4 2008
http://www.bloomberg.com/apps/news?pid=20601087&sid=aVX9WZ1IqEKU&

PERMALINK

9 Responses to “Bank of England Slashes Rates 100 Basis Points”

  1. Mark E Hoffer Says:
    December 4th, 2008 at 7:11 am

    don’t forget Sweden’s 175 bps move to the d-side, as well..

  2. jmborchers Says:
    December 4th, 2008 at 7:20 am

    If they stand by unity ECB cuts by 100 bps as well. They promised unity. Let’s see what happens. I’m very bullish about the market for the next few months. After another Q I think everyone will look how things are going but for now I think the market is almost out of sellers at these prices.

  3. Mark E Hoffer Says:
    December 4th, 2008 at 8:33 am

    link, for above comment: http://www.riksbank.com/

    it was, more specifically, their ‘repo’ rate..

  4. Robert M Says:
    December 4th, 2008 at 8:46 am

    Why is it that no one seems to understand the demand side of the equation. Incresisng the supply side will not help any more. You can cut taxes to zero and if no one has an income they still will not buy anything.

  5. wally Says:
    December 4th, 2008 at 9:10 am

    A bit behind the curve, I’d say. First, if we are moving to deflation, there is no ‘zero bound’ to interest rates. Second, the rate cuts in the US - begun long enough ago to have had effects by now - have done nothing to forestall the rampant solvency problems. The liquidity problems are coming back from the other end, as Robert M says.
    These cuts are pointless.

  6. Winston Munn Says:
    December 4th, 2008 at 9:30 am

    @Robert M,

    The ones running the show are monetarists - please do not confuse them with either facts or logic.

  7. 10 cc Says:
    December 4th, 2008 at 11:41 am

    Japan must really be getting pissed.

    In danger of losing their monopoly as distributor of free money to the world and the undisputed title belt for world champion currency killer.

  8. DavidB Says:
    December 4th, 2008 at 12:07 pm

    maybe they should all crank rates to 10%. That way at least seniors would have cash flow. It would get people savings and thus increase deposits which is what policy makers are screaming for. Plus it would wipe out all the marginal businesses. It would probably wipe out a few marginal countries too. Short term pain for long term gain. Think of the screaming though

  9. John Pozzi Says:
    December 4th, 2008 at 10:53 pm

    o% interest at http://www.grb.net