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UK Cuts Interest Rates, But EU Holds Steady

Subprime woes force first rate cut in Britain in over two years

By Jason Farago, Newser Staff

Posted Dec 6, 2007 7:21 AM CST

(Newser) – The Bank of England cut its benchmark interest rate for the first time in over two years today, reducing the bank rate by a quarter-point to 5.5%. The cut drove the pound down to about $2.02, its lowest in 2 1/2 months. The European Central Bank in Frankfurt, however, didn't go along: it decided to keep its main interest rate unchanged at 4% despite fears of an over-strong euro.

Pressure was high on the Bank of England to cut interest rates despite the protestations of Mervyn King, the bank's embattled governor, about rising inflation. Today's cut comes after central banks in the US and Canada cut rates in an attempt to cushion the blow of the subprime mortgage collapse, buoy the housing market, and avoid a serious economic slowdown.

Pedestrians walk past a display showing the FTSE 100 in London, Thursday, Dec. 6, 2007. The Bank of England cut its key interest rate by a quarter percentage point to 5.5 percent on Thursday after growing... (Associated Press)

Jean-Claude Trichet, President of the European Central Bank ECB, addresses the media during a press conference in Frankfurt, Germany, on Thursday, Nov. 8, 2007. The ECB held its key interest rate unchanged... (Associated Press)

Bank of England governor Mervyn King speaks in this image taken from TV to the House of Commons Treasury Committee in London, Thursday Sept. 20, 2007. (Associated Press)

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UK Cuts Interest Rates, But EU Holds Steady

Subprime woes force first rate cut in Britain in over two years

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ECB Makes Massive $639B Loan to Banks

For a period of three years

As Summit Looms, ECB Slashes Rate Again

Meanwhile, Merkel and Sarkozy try to drum up support for plan

Clutching at Straws

Euro leaders must embrace real fiscal union before it's too late

Sarkozy: Change—or Kiss Eurozone Goodbye

At odds with Germany over ECB, deflation, budget enforcement

Central Banks Move to Ease Market Strains

Stock futures surge on the news

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UK Cuts Interest Rates, But EU Holds Steady

Subprime woes force first rate cut in Britain in over two years

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OTHER STORIES ON OUR RADAR

European Central Bank • Bank of England • Mervyn King • interest rate cut

MOST POPULAR STORIES

[ By Views ]

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More Newser Stories

ECB Makes Massive $639B Loan to Banks

For a period of three years

As Summit Looms, ECB Slashes Rate Again

Meanwhile, Merkel and Sarkozy try to drum up support for plan

Clutching at Straws

Euro leaders must embrace real fiscal union before it's too late

Sarkozy: Change—or Kiss Eurozone Goodbye

At odds with Germany over ECB, deflation, budget enforcement

Central Banks Move to Ease Market Strains

Stock futures surge on the news

About Us

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Newser By Users

Community

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