Bank of England Slashes Interest Rates

The Bank of England cut interest rates today. This in itself was not unexpected as market watchers were predicting, on average, a reduction of half a percent. This was based mostly on the fact that the Bank’s Monetary Policy Committee had never before approved a reduction greater than fifty basis points.

Yesterday, I wrote that maybe it is time for the Bank to make a little history and to provide England’s battered economy with greater relief – maybe even a full percent cut.

Bank of England Official Bank Rate after the 100 basis points cut

It seems that the Bank is listening and history was indeed made as the Monetary Policy Committee has slashed rates by a percent and a half. This is a full 150 basis points, bringing the benchmark lending rate to 3 percent; it’s lowest since 1955.

Now, let’s see what the European Central Bank has in store for us as a rate cut is expected from the eurozone countries as well.

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