Quality Speaks For Itself

UK base rates cut to all time low

Posted in Financing by Ash on January 8th, 2009 03:15pm

The Bank of England has cut rates again, this time by 0.5% to 1.5%. These are truly historic times with this being the first time that rates have fallen below 2% since the Bank of England was founded in 1694. Is it enough? My guess is probably not, and I would expect the market to react as such.

However, I think that it is a sensible step for now and that there will now be pause for the economy to catch its breath after the substantial cuts we have seen since the cuts started in October and wait to see what effect these cuts are having. Any more moves and the Bank of England will have effectively have used all of its interest rate bullets. The only option then left would be quantitative easing (printing more money!) which really would be akin to reloading the gun for one last shot.