The Bank of England cut its key interest rate by a quarter-point Thursday to 5.5% after economic data in the previous couple of days showed a sharp slowdown in consumer confidence and in services sector growth. The rate cut is the first since August 2005 and comes after five hikes since August 2006. At the start of the month, most economists had been predicting the bank would hold off until January or February to lower rates. But those expectations shifted shortly ahead of the decision after data showed activity in the dominant services sector hit a four-year low, leaving the bank's decision on a knife edge. Also likely weighing on the rate-setting committee's decision was a sharp fall in consumer confidence and a 1.1% drop in house prices in November, according to the latest figures from HBOS division Halifax. The Monetary Policy Committee's vote may well have been close, however, as inflation remains a significant worry. At 2.1%, inflation stands only slightly above the government's 2% target. But Governor Mervyn King warned a parliamentary committee at the end of November that rising energy prices could add upward pressure. Ha, ha,ha....Mr. King, what an "aristocratic" move !
DJ Financial wire is reporting BOE CPI likely the remain above target. BOE: upward risks to inflation remain. BOE:Financial market conditions have deteriorated. It would seem this was done as not to make the US fed look like it's bailing out the banks.
the dollar is rallying across the board, I dont think the market is realizing that if these other countries think the crunch is bad enough they need to cut with a good economy that means that fed will certainly open the gates for generous cuts
I would be interested to from legal minds - here the Bank of England bailed out a private company (Northen Quick Sand) to the tune of £25 billion due to the firm's idiocy, what chances do I have to make a constitutional case to demand that B of E also bails my firm to the tune of a measly £50 000 (losses) as a result of my idiocy operations on the market. Equality heeh?
The point is NR were bailed out without anyone really knowing the full extent of their exposure? so what ever collateral they put up could have been non-existant