Wednesday 8 October 2008

Central banks cut interest rates

Seven central banks - including the Bank of England - have cut their interest rates by 50 basis points.

The UK rate move - which had not been expected until Thursday - puts interest rates at 4.5% from 5%.

The US Federal Reserve has cut rates from 2% to 1.5% and the European Central Bank trimmed its rate from 4.25% to 3.75%.

The central banks of Canada, China, Sweden and Switzerland all took similar action in the co-ordinated move.

The unprecedented step is aimed at steadying a faltering global economy and slumping stock markets.

The Fed said that it had acted "in light of evidence pointing to a weakening of economic activity and a reduction in inflationary pressures".

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