The Bank of England—under massive pressure to stem the red ink drowning the continent's economy—slashed its key lending rate by an unprecedented 150 basis points today, reports Reuters. The move, which set the rate at 3%, dwarfed the 75-point cut market watchers had anticipated. Moments later the European Central Bank announced its own cut of 50 points, bringing rates in the eurozone to 3.25%.
Grim job news from the US, a broad housing-market and manufacturing-sector decline in Britain, and weak earning reports combined today to foil a brief rally by Asian and European markets after Barack Obama’s election. Europeans, faced with the first recession to encompass the euro zone since its inception, are now carefully watching for Obama to assemble his economic team, including Treasury Secretary Henry Paulson's successor.