N&G News
Base Rate Cut to 2%
The Bank of England has today cut interest rates by a further 1% to 2%, which is the lowest level since 1951. This now leaves the door open for further rate cuts, witht the expectation that the base rate could be cut to 1% in the early part of 2009. Interest rates have never been below 2% since the central bank was created in 1694. There has been talk of interest rates falling to as low as 0.5% in 2009, which is a distinct possibiliy. The chance of zero interest rates has been mooted by some, but this is less likely. The European Central Bank today cut rates by 0.75% to 2.5%, and we therefore now have a lower base rate than Europe. Sterling has droped to 1.15 to the Euro, and under 1.48 to the dollar, and was at one point lower than 1.45 to the Dollar today. This is an all time low against the Euro since it was introduced in 1999, and a six and three quarter year low against the dollar.