Banks join to slash rates


The Bank of England has joined with other world banks and cut interest rates.

The move came ahead of tomorrow’s scheduled meeting of the Bank’s Monetary Policy Committee (MPC) and reduced rates by half a per cent.

The Bank joined the US Federal Reserve and the European Central Bank in a bold move devised to fight the deepening economic crisis.

Other banks involved in the move included Sveriges Riksbank, the Swiss National Bank, the Bank of Japan and the Bank of Canada.

A joint statement explaining the decision noted: "The recent intensification of the financial crisis has augmented the downside risks to growth and thus has diminished further the upside risks to price stability."

The MPC said it remained committed to fighting inflation and reaching the government’s target of two per cent.

After considering the situation, it concluded "an immediate reduction in Bank Rate of 0.5 percentage points to 4.5 per cent was necessary to meet the two per cent target for CPI inflation in the medium term".ADNFCR-1329-ID-18817155-ADNFCR