interest rate cut

Recession

Recession until end of 2009

The UK recession will be ‘deeper and longer’ than first predicted, according to the Confederation of British Industry (CBI). The CBI has revised its September economic forecast that the economy would grow by 0.3% next year, and has now predicted that it will instead contract by 1.7%. The business group has also forecast that the recession is likely to last until the end of 2009 and that unemployment will reach 2.9 million by 2010. CBI deputy director–general John Cridland said: “What is clear is that the short and shallow recession we had hoped for a matter of months ago is now likely to be deeper and longer lasting,” “Given the speed and force at which the downturn has hit the economy, we have reassessed and downgraded our expectations for UK economic g... »

Finances

Groups call on Banks to cut costs

Business groups have welcomed the recent 1.5% Bank of England (BoE) interest rate cut, but warned that banks must reduce their borrowing costs for small firms to benefit. The BoE’s decision to cut interest rates from 4.5 to 3% has provoked a positive reaction from business groups concerned about the effects of the economic crisis. The Federation of Small Businesses (FSB) national chairman John Wright said that if the banks pass on the rate cut in full, it would result in a £750 million saving for small firms on the cost of their overdrafts and other loans. “All this will come to nothing if the banks do not follow through and pass on the rate cuts to those small firms struggling with increased costs of credit,” Forum of Private Business chief executive Phil Orford sa... »

Surprise Cut in Interest Rates

Surprise Cut in Interest Rates

Following on from this morning’s news of the government-backed bail-out of the UK’s Banks, The Bank of England has cut interest rates, a day earlier than expected. October’s rate decision by the Monetary Policy Comittee was not due until tomorrow. The Bank of England has cut the interest rate by 0.5% with the interest rate now at 4.5%. The European Central Bank also cut its rate, down from 4.25% to 3.75%, whilst the Fed in the US slashed rates from 2% to 1.5% Central banks in Canada, Sweden & Switzerland have also cut their interest rates in a globally coordinated move. The rate cut is expected to restore confidence to businesses and consumers, coming at a critical time in world financial developments. »